Postpone the Deadline for the Independent Foreclosure Review Until 215,000 Cases Have Been Released
  • Petitioned Federal Reserve, and The Comptroller Currency

This petition was delivered to:

Federal Reserve, and The Comptroller Currency

Postpone the Deadline for the Independent Foreclosure Review Until 215,000 Cases Have Been Released

    1. Petition by

      ForeclosureHelpSCC

Feb 28th Update: Thirteen of the original banks/servicers have agreed to a new plan that includes $3.6 billion in direct cash payments and $5.7 billion in modification relief.  For more information, visit our blog post:

Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance.

 

 

Background:  In 2010, three banking regulators conducted reviews at 14 loan servicers, and examined 2,800 foreclosure files for homeowners who were in foreclosure between 2009 and 2010.  The regulators found: “The reviews found critical weaknesses in servicers’ foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third-party vendors, including foreclosure attorneys. While it is important to note that findings varied across institutions, the weaknesses at each servicer, individually or collectively, resulted in unsafe and unsound practices and violations of applicable federal and state law and requirements.”

As a result of these findings, the 14 servicers and banks agreed to hire independent contractors to review the files of homeowners who were in foreclosure from 2009 to 2010 and who requested a review.  Approximately 4.3 million homeowners were in foreclosure during this time period.  In cases where the review found that a bank or servicer inappropriately processed a homeowner’s file, or incorrectly foreclosed on a homeowner, the homeowner could receive financial compensation ranging from $500 to $125,000 plus lost equity.

The problem:  Due to limited marketing, and the fact that very few homeowners have been notified about the results of their review, only a small fraction of homeowners are aware of the review and have applied to have their case reviewed.  In fact, the GAO released a 74- page report earlier this year that was highly critical of the outreach methods used to contact potentially eligible borrowers.  The low numbers of homeowners applying is partly why the deadline was extended three times in 2012. The current deadline to apply for the review is December 31, 2012, yet few homeowners have applied, and for those who have applied, very few have been informed of the results of their review.

Beyond the regulator’s review of files in 2010, there is clear evidence that robo-signing happened and caused harm to homeowners.   As the Huffington Post noted, a research report released in November found that 800,000 more homeowners should have qualified for the Making Home  Affordable program, but did not because of a few large servicers who modified loans at a much lower rate than  their peers.  Ironically, one of the report authors works for the Office of the Comptroller Currency, while another two of the authors work for the Federal Reserve.

In addition to the lack of awareness, a recent media report suggests that for every $1 a homeowner may receive as a result of the review, a bank is spending $4 to pay the consultants who are conducting the review of the homeowner’s case. (See: American Banker: Foreclosure Reviews: Exorbitant for Banks, Gold Mines for Consultants)

There have also been numerous questions raised about how independent the review actually is, and whether or not banks are playing too large of a role in judging their own mistakes. (See: Propublica: “Is BofA’s Foreclosure Review Really Independent? You Be the Judge”)

The solution:  The Federal Reserve, and the Office of the Comptroller Currency, who created the agreement, should postpone the deadline to apply for the program until two months after at least 215,000 homeowners have been notified of the results of their review.   This is a reasonable number and represents only five percent of the 4.3 million homeowners that were in foreclosure from 2009-2010. 

Far better than the current last-minute marketing plan, this would allow for word-of-mouth marketing from homeowners who were found to have been financially injured because of the mistakes made by their banks or servicers.  

In addition, this would allow the general public, housing advocates, and investigative reporters to judge the results of the review and see if they are in fact “independent.”   Under the current system, very few homeowners have been notified about the results of their review, despite the fact that the program started accepting applications over a year ago.  For more information about ForeclosureHelpSCC, visit: www.foreclosurehelpscc.org.

To:
Federal Reserve, and The Comptroller Currency
Please postpone the deadline for the Independent Foreclosure Review until two months after at least 215,000 homeowners have been notified about the results of their review.

Sincerely,
[Your name]

Recent signatures

    News

    1. Reached 200 signatures
    2. Feb 28th Update on Replacement Program for 13 Banks and Servicers

      Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance.

      By Sean Coffey, MPA, Program Manager at Foreclosure Help Editor's note: Foreclosure Help is a program funded by the city of San Jose and the city of Sunnyvale, and we can directly assist homeowners and tenants in San Jose and Sunnyvale who are facing foreclosure.

    3. New Details on Independent Foreclosure Review: What Banks Are Included...

      How much is the new settlement? $3.3 billion will be distributed in direct payments to eligible borrowers, while an additional $5.2 billion in relief will be granted through loan modifications and forgiveness of deficiency judgments.
      http://foreclosurehelpscc.wordpress.com/2013/01/08/new-details-on-independent-foreclosure-review-what-banks-are-included-what-banks-are-not/

      New Details on Independent Foreclosure Review: What Banks Are Included, What banks are not

      More details are emerging about the replacement of the Independent Foreclosure Review, and we will continue to update as more information is released from the Federal Reserve and the Office of the Comptroller Currency. We suspect that it will be several weeks before actual program details emerge, and there have been suggestions that payments to homeowners would not start until March 2013 at the earliest.

    4. Independent Foreclosure Review Program is Replaced

      Thanks to everyone who signed this petition. The Federal Reserve announced today that the Independent Foreclosure Review will be replaced with a new program and that a Payment Agent will be appointed in March 2013. We will continue posting updates to our blog as more information is released-
      http://foreclosurehelpscc.wordpress.com/2013/01/07/independent-foreclosure-review-is-replaced-with-new-settlement/

      Independent Foreclosure Review Program is Replaced With New Settlement

      By Sean Coffey, MPA, Program Manager of ForeclosureHelpSCC It is now official, the Independent Foreclosure Review program is being replaced with a program that will provide direct cash payments to homeowners that were foreclosed on inappropriately between 2009-2010. According to a Federal Reserve press release: "A payment agent will be appointed to administer payments to borrowers on behalf of the servicers.

    5. Reached 100 signatures
    6. New Settlement May Scrap the Independent Foreclosure Review

      From the NYT today: "Consultants initially estimated that each loan would take about eight hours, at a cost of up to $250 an hour, to go through.The costs of the reviews have ballooned, though, according to people with knowledge of the reviews, in part because each loan file is taking up to 20 hours to review...the reviews have cost the banks about $1.5 billion, according to those people. Pressure to reach a settlement with the banks has been building, particularly within the Office of the Comptroller of the Currency, amid widespread frustration that the banks’ mandatory review of loan files was arduous and expensive , and would not yield promised relief to homeowners, according to five former and current banking regulators.
      http://www.nytimes.com/2012/12/31/business/settlement-expected-with-banks-over-home-loans.html?hp&_r=0

      Settlement Expected With Banks Over Home Loans

      Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans.

    7. Reached 50 signatures
    8. 7 Reasons to Postpone the Deadline for the Independent Foreclosure Review

      Seven Reasons to Postpone the Independent Foreclosure Review

      Editor's Note: While we strongly encourage anybody reading this article to see if they are potentially eligible for the Independent Foreclosure Review and to apply, we remain deeply concerned with the outreach and administration of the Independent Foreclosure Review. Guides for applying: English: Independent ... Continue reading →

    9. Reached 25 signatures

    Supporters

    Reasons for signing

    • Wendell Ross HOUSTON, TX
      • about 1 year ago

      i lost my home

      REPORT THIS COMMENT:
    • David Cornish CLEBURNE, TX
      • about 1 year ago

      Home was foreclosed on in 2010

      REPORT THIS COMMENT:
    • stephany cornish CLEBURNE, TX
      • about 1 year ago

      our house was foreclosed on in may 2010 and I didnt hear about this until now

      REPORT THIS COMMENT:
    • robert boulerice DAYTON, OH
      • over 1 year ago

      I believe my foreclosure review was done incorrectly

      REPORT THIS COMMENT:
    • kenneth gastineau PADUCAH, KY
      • over 1 year ago

      stop the fraud

      REPORT THIS COMMENT:

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