Independent Foreclosure Review Process Flawed
Federal banking regulators have called for Independent Foreclosure Reviews to determine if there were mistakes in the foreclosure process for loans in foreclosure during 2009 and 2010. Fourteen mortgage servicers are required to review those loans and compensate homeowners for their errors. However, the Government Accountability Office (GAO) has announced that there are flaws in the Independent Foreclosure Review (IFR) process that could negatively impact the success of the program, which could affect more than four million foreclosed homeowners.
Among the flaws revealed by the GAO include problems with the servicers' notifications to foreclosed homeowners about the IFR and their right to request that their files be reviewed. There are also concerns that the information sent to borrowers is difficult to understand and often fails to include what compensation, if any, borrowers may receive if wrongdoing is found.