Sunday, January 20, 2013

Huge Flaws in Independent Foreclosure Review Process?

Foreclosure defense attorneys are acutely aware of the myriad of problems with the way that many of the nation’s biggest lenders have handled foreclosures over the past decade.  All of that reached culmination in the housing crisis and subsequent “robo signing” scandal where many of those issues made national headlines.  Countless homeowners had their rights violated in one way or another as a result of the sloppy, confusing ,and downright fraudulent practices by some lenders.

In response to the disaster, an enormous “auditing” process was initiated known as the Independent Foreclosure Review.  It involved thousands of contractors combing through millions of pages of documents to get to the bottom of the many problems with the process--things like mixed up loan modifications, overcharges ,and paperwork errors.  However, according to a new story in the Huffington Post, that auditing process was doomed from the start.

Covering Up Foreclosure Mistakes
The story explains that those charged with spotting the errors were given only minimal training and confusing instructions.  Some of those workers even went so far as to say that they were told by one lender, Bank of America, to ignore some instances where there was obviously bank-caused mistakes. The article quotes one of the contract workers who shared information as saying: “We knew what we were looking at.  But we were told under threat of losing our jobs to not report what we saw."

A big concern was apparently the lack of uniformity and independence in the review.  The former chair of the Federal Deposit Insurance Corporation (FDIC) did not mince words when criticizing the auditing process.  She said, "It was doomed from the beginning.  It was designed to generate fees for consultants, not to help homeowners."

These serious problem with this auditing process is what led to its sudden halting last week.  Instead, a new $8.5 billion settlement was reached with ten large mortgage companies. Virtually all of the homeowners who received a foreclosure notice in the peak of the housing crisis--2009-2010--are expected to receive some compensation, though it may be only a small check in many cases.  In addition, some of the funds will be used to negotiate loan modifications to help keep families in their homes.

Help with Foreclosures
Sadly, these reports of cut corners and disregard for consumer rights is not exactly news to those of us who have worked on these legal issues for years.  It is yet another reminder of the need for all residents in Chicago, Oak Park, River Forest, and other nearby communities to seek out professional help when facing foreclosures.  These big lenders should not be able to get away with violating the law and stepping on the rights of homeowners.  You have options to fight back and defend yourself when facing foreclosure.  Please take a moment to contact our legal team today to see how we can help.

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