Time's running out for housing consumers who stand to collect as much as $125,000 if they were wronged by abusive foreclosure procedures.
Dec. 31, 2012 is the third and final deadline (to date) for filing a claim under the Independent Foreclosure Review .
The federal Independent Foreclosure Review order, originally signed back in April 2011, is a mandate for 14 mortgage servicers to perform independent reviews of an estimated 4.5 million foreclosures completed in 2009 and 2010.
The order was designed to ferret out questionable foreclosure procedures - errors, misrepresentations, and other deficiencies - and provide restitution to any consumer who was financially harmed by the wayward procedures, most of which are now illegal.
Lump sum payments range from a few hundred dollars to as much as $125,000 plus equity.
Foreclosure review problems
The foreclosure review deadline has been extended three times, the third time after the review process itself came under review by a Government Accountability Office (GAO) report that found flaws in administrative procedures.
The GAO report noted problems in:
Compensation payments based on unfair segregation of potential victims.
Poor outreach and marketing efforts.
Poorly written foreclosure review notifications.
English-only notifications that disadvantaged non-English speaking consumers.
Greater outreach mandated
The third extension by the Office of the Comptroller of the Currency and Board of Governors of the Federal Reserve System came with additional mandates for mortgage servicers to produce more readable documents in a variety of languages and to conduct additional outreach and awareness efforts to reach more consumers.
The Federal Reserve this week also announced a Community Partners Tool Kit , which consumer advocates and community, housing and faith-based groups can use to further publicize the foreclosure review in its final days.
The kit includes print, radio, television, and online advertising targeting communities hardest hit by mortgage foreclosures .
Outreach by mortgage servicers also includes direct contact with eligible borrowers by mail, e-mail, and telephone.
Foreclosure review rules
Independent Foreclosure Reviews are free.
Requesting a review does not preclude borrowers from taking other actions related to their foreclosures .
Mortgage servicers are not permitted to require a borrower to sign a waiver of the borrower's ability to pursue claims against the servicer in order to receive compensation under the Independent Foreclosure Review.
Federal regulators say they are monitoring mortgage servicers for a complete and impartial foreclosure review process.