Consumers have two weeks left to ask for an independent review of their foreclosure cases, an analysis that could result in compensation up to $125,000 if lender wrongdoing is found.
Federal banking officials are overseeing the free reviews on primary residences that were in the foreclosure process from 2009 through 2010.
So far, 474,000 cases nationwide are pending review. The deadline for filing a request is Dec. 31.
Last year, the Office of the Comptroller of the Currency and other agencies ordered 14 mortgage servicers to address problems with their foreclosure practices.
“The orders directed the mortgage servicers to fix what was broken, identify who was harmed and provide remediation,” said Bryan Hubbard, spokesman for the Office of the Comptroller of the Currency.
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Compensation ranges from a few hundred dollars up to $125,000 in the most egregious cases, Hubbard said. In rare instances, homeowners may have their foreclosures overturned, he said.
The reviews will be conducted by neutral third parties. Homeowners who ask for reviews or accept any money do not give up their rights to later sue their lenders, Hubbard said.
What’s more, the reviews are not just open to homeowners who lost their properties in foreclosure. Those who completed short sales or who later brought their mortgage payments current would be eligible as long as their lenders served them with foreclosure papers at some point.
ClearPoint Credit Counseling Solutions, a Virginia-based agency with an office in Miami, is working with consumers to complete their applications. ClearPoint is a housing counseling agency approved by the Department of Housing and Urban Development.
“We help them with the paperwork,” said Isabel Duran, a certified housing counselor with ClearPoint.
During the height of the housing crisis, homeowners complained of improper foreclosure practices by lenders.
In late 2010, bank employees admitted under oath that they rubber stamped foreclosures without knowing the details of the individual cases.
That prompted some banks to temporarily freeze foreclosure filings and later led to a $25 billion national mortgage settlement between five major lenders and 49 state attorneys general.
The foreclosure reviews are part of an enforcement action by federal officials and are not affiliated with the $25 billion settlement.
Longtime Miami housing analyst Lewis Goodkin said the reviews are important, even in the cases that do not reveal any lender fraud.
“There won’t be any giveaways, but to me, it accomplishes something,” Goodkin said. “It gives the homeowners fair treatment.”