The Office of the Comptroller of the Currency has found enough evidence of poorly handled foreclosures to mandate fourteen major mortgage providers submit their records for review. Between now and the end of the year homeowners who went through a foreclosure from 2009 to 2010 will receive letters asking if they would like their case reviewed by an independent auditor. They have until the end of April 2012 to give their reply.
The scope of this program could affect over 4.5 million cases across the nation. While not everyone will take advantage of the offer, many foreclosure attorneys will recommend it to their clients. The homeowners have nothing to lose by having their case reviewed. If the review finds the foreclosure was handled improperly, causing any type of financial damage to the homeowner, some type of compensation will be required.
Constantly changing foreclosure laws will have each review taking a couple of months to complete. Proving financial damage due to a bad foreclosure will be difficult with the current housing market. Homeowners who were making payments during the foreclosure process will be compensated under the program. Those who had to pay excessive fines, fees or penalties will receive a refund.
There are conflicting opinions on the program among foreclosure attorneys. Some feel it is a step in the right direction; banks need to be held accountable for their shoddy work. Others are afraid it will only cause the banks to find new fees to charge account holders to make up for any compensation they have to pay. Since the banks are going to have to pay for the outside audits, they feel they are already on the losing end. Banks do not like to lose money, they will make up for this is some other way. Perhaps the new program needs to take this into consideration and find a way to keep this from happening.