Big financial institutions continue to foreclose on troubled borrowers in error — either while a homeowner is awaiting a loan modification or because of fees incorrectly added to the seizure — according to a national survey of attorneys representing borrowers.

One intent of the recent $25-billion mortgage settlement among attorneys general, the nation’s five largest mortgage servicers and certain federal agencies was to do away with such errors, but in recent weeks consumer advocates have raised concerns that borrowers who are in the foreclosure process may still be harmed.

More than 80% of the attorneys surveyed said they had in the last year represented a borrower who was awaiting a loan modification but a foreclosure sale was attempted.

The same percentage of attorneys said they represented a borrower who had fees improperly assessed on their home by banks while they were in foreclosure.

The survey was the result of interviews of 260 consumer attorneys in 45 states, conducted by the National Consumer Law Center and the National Assn. of Bankruptcy Attorneys this month. For the full results of the survey click here.

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Article source: http://www.latimes.com/business/money/la-foreclosure-errors-20120222,0,2222605.story

JEFFERSON CITY, Mo. — The ink wasn’t even dry on a settlement with the nation’s top mortgage lenders when Missouri Gov. Jay Nixon laid claim to a chunk of the money to avert a huge budget cut for public colleges and universities.

He’s not the only politician eyeing the cash for purposes that have nothing to do with foreclosure. Like a pot of gold in a barren field, the $25 billion deal offers a tempting and timely source of funding for state governments with multimillion-dollar budget gaps.

Although most of the money goes directly to homeowners affected by the mortgage crisis, the settlement announced this month by attorneys general in 49 states includes nearly $2.7 billion for state governments to spend as they wish.

Some are pledging to use it as relief for struggling homeowners or to help related initiatives such as a Michigan plan to assist children left homeless by foreclosures. But several states are already planning to divert at least some of the money to prop up their budgets, and more will be wrestling with those decisions in the coming weeks.

For some consumer advocates, the diversion is reminiscent of the 1998 tobacco settlement in which states spent billions on projects that had nothing to do with curbing smoking.

“We shouldn’t be in the position of taking money that is intended to help consumers and their mortgage tribulations and putting that to another purpose,” said Joan Bray, a former Democratic Missouri senator who now is chairwoman of the Consumers Council of Missouri.

States that use the onetime payout for immediate expenses may also face the question of what to do next year when the money is used up. But officials in struggling states say they must deal with the most immediate problems first.

A federal judge in Washington could approve the final settlement by the end of February. Once that happens, money could begin flowing to states within a couple of weeks, arriving just as lawmakers are crafting budgets for the upcoming fiscal year.

Republican legislative leaders in Missouri have already embraced the Democratic governor’s plan to use nearly all of the state’s $41 million settlement payment to help shore up the budget. The mortgage money allowed Nixon to reduce his proposed funding cut for public colleges and universities from 12.5 percent to 7.8 percent – potentially easing student tuition increases.

The money was “as we looked at it, relatively unfettered,” Nixon said. “Clearly the economy was affected all across the country by foreclosure challenges, and I think it is apt and appropriate to use those dollars to help restore some of the challenging cuts that I was forced to make.”

In Pennsylvania, where a fourth straight budget deficit is projected, Democrats are pressing the Republican-run attorney general’s office to use some of its $69 million payment to offset $2 billion in cuts to programs that benefit education, the elderly, disabled or poor.

“The governor’s budget has so many cuts to so many valuable programs, if the attorney general’s office has $69 million, why not use that to offset these cuts to essential programs?” said state Rep. Joe Markosek, the ranking Democrat on the House Appropriations Committee.

Vermont plans to use $2.4 million from the settlement to help balance its budget. Maryland Attorney General Doug Gansler said about 10 percent of his state’s $62.5 million payment will be made available for the governor and lawmakers to spend as they choose.

In Wisconsin, Gov. Scott Walker wants to use $26 million to plug a state budget hole because the foreclosure crisis had a “direct impact on the economy.” But the Republican governor’s plan has ruffled some Democrats, including Milwaukee Mayor Tom Barrett.

St. Louis homebuilder Bob Suelmann, who has a background in real estate and finance, said it’s “ridiculous” for states to divert mortgage settlement payments to other purposes.

“It’s like taking tax money that was supposed to go to road improvements, and then suddenly the bridges are falling down and you don’t know what to do about it,” Suelmann said. “That money should go to something that can directly improve the situation with the housing program.”

When the tobacco settlement was reached, states initially promised to beef up public health with the $206 billion paid out over several decades. Instead, much of the money went to general government operations. State funding for tobacco-prevention programs has now fallen to its lowest level since 1999, according to recent estimates.

“The lesson is advocates have to be vigilant,” said Marie Cocco, a spokeswoman for the Campaign for Tobacco-Free Kids.

Most states will probably use the money for mortgage-assistance hotlines, mediation between borrowers and lenders, legal aid and financial counseling, said Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, who was the lead negotiator on the settlement.

But, he added, officials “have to acknowledge that there has been damage done to states and their budgets and their services because of this mortgage crisis. …So states will have some flexibility in how they spend” the money.

Illinois Attorney General Lisa Madigan said she will oppose any efforts to use the money to prop up the state’s shaky budget.

California, which was one of the hardest hit states by the mortgage crisis, will receive the largest payment – about $430 million at a time when the state is facing a $9.2 billion deficit. A spokesman for Gov. Jerry Brown said no decision has been made on how to spend the money.

Some consumer advocates say they will be watching closely to see where the payments are spent.

“As insufficient as it is,” said Kathleen Day, a spokeswoman for the nonprofit Center for Responsible Lending, “this money was intended to go directly to help struggling homeowners.”

___

Associated Press writers Chris Blank in Jefferson City; Marc Levy in Harrisburg, Pa.; Scott Bauer in Madison, Wis.; David Gram in Montpelier, Vt.; Brian Witte in Annapolis, Md.; Beth Duff-Brown in San Francisco; Chet Brokaw in Pierre, S.D.; Tim Martin in Lansing, Mich.; Christopher Wills in Springfield, Ill.; Randall Chase in Dover, Del.; Norma Love in Concord, N.H.; Rachel La Corte in Olympia, Wash.; and Derek Kravitz in Washington contributed to this report.

Also on HuffPost:

Article source: http://www.huffingtonpost.com/2012/02/22/national-foreclosure-settlement_n_1294867.html

2012 will be a benchmark year for commercial real estate, speakers said Tuesday at the Ninth Annual Market Review presented by the Greater Richmond Association for Commercial Real Estate.

It will be the year the market turned the corner, said Jeffrey D. Doxey, president of Eagle Commercial Realty, who spoke about the retail sector.

The morning event at the Westin Hotel drew about 300 people in real estate and related fields.

“We will look back at 2011 as the bottom,” said Bill White, president of Joyner Fine Properties, who addressed residential real estate. “We think we are on a road to recovery.”

He said foreclosures will continue to vex the residential market for another 18 to 24 months, but stability has returned and home prices will begin to rise in 2013.

J. Scott Adams, president of the mid-South region for CBRE, said capital has returned to commercial real estate.

“The fundamentals are improving across the board,” he said. “Richmond is a great place to do business.”

Investment sector

Adams noted that commercial property sales in the Richmond area outpaced the nation on a percentage basis last year.

The area saw a three-fold increase over national averages, Adams said, “which is exciting because it means investors believe in the fundamentals of Richmond.”

Nationally, commercial property sales rose to $209.1 billion in 2011 from $129.9 billion in 2010. Locally, they increased to $603.3 million from $222.8 million a year ago.

Six property sales in the Richmond area with a total value of about $300 million accounted for more than all the sales here in 2010, Adams said.

The biggest — and only local buyer among the top six deals — was Lingerfelt Development, which purchased the Liberty office portfolio of 14 properties in western Henrico County for $97 million in May.

He noted that the amount of troubled loans is subsiding with lenders taking back properties and resolving or restructuring loans.

However, loans made from 2005 to 2007 will come due 2012 through 2017, presenting another challenging period, he said.

Still, real estate as an investment is beating stocks and bonds, Adams said. “Our industry should continue to outperform other industries. … It is the No. 1 investment alternative.”

Industrial sector

Matthew Braun, a specialist with Cushman Wakefield | Thalhimer, said 2011 reversed two years of negative absorption — when more space is vacated than leased —in the industrial sector.

The vacancy rate in the industrial sector here dipped below 12 percent in 2011, he said, noting that the national average vacancy rate is about 10 percent.

Amenities that began to creep back into deals to maintain occupants will get reversed. “And the focus will be on quality tenants instead of warm bodies,” Braun said.

Construction starts and finishes, essentially nonexistent last year, will change in 2012 with 2.2 million square feet of space that will be built for Amazon.com Inc.

The Seattle-based online retailer plans to invest $135 million to open two distribution centers in Chesterfield and Dinwiddie counties this year that will employ 1,350 people.

“Before this year is out, we will see some other big announcements,” Braun predicted.

Office sector

Jane duFrane, director of leasing for Highwoods Properties, said 2011 was the year of big deals for office space.

The biggest space taker was Mondial Assistance USA, now Allianz Global Assistance, which leased 288,560 square feet in Deep Run I in Henrico, the headquarters building for the former Circuit City Stores Inc.

The big deals helped reduce the vacancy rate in the office sector to 11.4 percent in 2011, duFrane said.

“In 2011, we leased a lot of space,” she said. “But there weren’t a lot of small deals.

“Richmond’s typical bread and butter is 2,000 square feet to 10,000 square feet. Where were those deals?”

If a company is looking for smaller office space, there is ample — 731 options, she said.

She noted that most new buildings were for medical offices and they were 100 percent pre-leased.

Developers are not risk-tolerant, she said. “The markets are still tight. No one is willing to go out on a limb and offer spec office space.”

Retail sector

Doxey with Eagle Commercial said retail sales are expected to rise 7.7 percent this year from 2011, the strongest increase since 1999.

Even so, analysts are predicting 3,000 to 5,000 store closings nationwide this year.

As many as 17,000 stores closed in the last three years, as the weak economy took its toll and consumers pulled back on spending.

“For 2012, the crystal ball is a little foggy,” Doxey said. “The game changers for the year —– if gas prices hit $5 a gallon, we will see a lot of consumers on the sidelines.”

This year could see a battle for survival between J.C. Penney and Sears, leaving the winner to compete with Kohl’s. “We believe it will be J.C. Penney,” he said.

Also, Staples is likely to emerge as the strongest among the three major office suppliers, he said.

He said Regency Square still has a lot of life, even though the troubled mall was taken back in December from Michigan-based Taubman Center Inc. by the lender.

Article source: http://www2.timesdispatch.com/business/2012/feb/22/tdbiz01-officials-commercial-real-estate-ready-to--ar-1706074/

The first step toward a California housing recovery has now been taken, in the form of the mid-February legal settlement between 49 states and the five large banks that were the leading culprits in the years of mortgage fraud that created a price bubble and convinced many thousands of homeowners to take on high-value mortgages.

The settlement is for at least $25 billion and could go as high as $45 billion, with Californians getting more than one-third of the benefits, or as much as $18 billion.

No, $18 billion in cash will not suddenly pour into the state’s economy. Actual cash should not amount to more than about $5 billion, still a pretty hefty amount.

But the first step toward reversing the effects of the foreclosure tide that has swept over tens of thousands of homes is to stop the bleeding by calling a halt to the constant increase in the inventory of existing homes that are either on the market or about to enter it. It’s the massive number of houses and condominiums involved that has driven home prices down, placing many thousands of homeowners “underwater,” with their properties worth less than the bank loans on them.

The 49-state settlement has been criticized on two scores: 1) That it is not big enough and insufficient cash will flow to homeowners bilked out of down payments that in some cases amounted to many thousands of dollars, and 2) That California is getting too large a share of the settlement.

The second of

those gripes is the more absurd. California gets the lion’s share of the settlement because this is where the largest portion of the abuses occurred. Some critics who claim the state’s share of the new pot is too high also assert the settlement is designed to assuage California’s chronic state budget deficits and that bank customers in other states will be dunned to pay for it via new fees.

No and no. Less than $1 billion of the money coming to California will go to the state itself, and that money will pay for new banking regulatory programs to police those same banks and others. If there’s to be significant help for the state budget, it will have to come via increased sales and income taxes as housing-related businesses begin to recover or through rises in property taxes if sales prices increase. Nor will bank customers pay. Bank of America, one of the banks in the settlement, tried upping its fees earlier this year and lost both a large numbers of customers and epic amounts of good will.

How will all this actually work? Bank of America, Wells Fargo, Citibank, JP Morgan Chase and Ally Financial (formerly GMAC) will actually pay out only $5 billion nationally in cash, including $1.5 billion to homeowners who were foreclosed upon illegally.

The cash in the settlement goes to about 750,000 of the 2 million homeowners foreclosed on nationally in the last four years, each getting a check for $2,000. Small redress, indeed, for the ordeal most have gone through and the improper fees often fraudulently charged to homeowners, plus the way big banks sometimes foisted property insurance on borrowers at up to three times the prevailing rates.

But relatively little cash will end up here, because the illegal robo-signings used in many foreclosures were never common in California.

The lion’s share of the settlement amount will come in reduced loan balances, with about 250,000 California homeowners due to get fully $12 billion in loan write-downs. Other kinds of credits could go to an additional 210,000 home-owners in parts of the state hit hardest by the housing bust.

This is where the foreclosure tide should start to peter out. It could also help the banks, which have reported that the average foreclosure costs them $60,000 in maintenance costs, repairs and brokerage fees.

By writing down loans that most likely would soon turn bad anyway, banks will save themselves expenses while allowing thousands of homeowners to get their heads above water again. Once that happens, there should be little more motive for borrowers to desert their houses, as many have done upon concluding that the value of their properties had declined so far that they could not in the foreseeable future rise above their loan amounts.

By cutting loan amounts, the banks essentially achieve the same goal outlined in a congressional proposal by Rep. Zoe Lofgren, which would have allowed under-water homeowners to pay no interest for five years, with their regular payments going strictly toward principal reduction.

All this is only a step along the path to housing recovery, but it’s the first really significant one — a point almost completely ignored by most critics.

Thomas D. Elias is a syndicated columnist who writes about state issues. Email him at tdelias@aol.com.

Article source: http://www.mercurynews.com/opinion/ci_20016100

SAN RAMON, Calif., Feb. 21, 2012 /PRNewswire via COMTEX/ –
Operation Reach 1, Inc., a two-time congressional award winning company, today announced that it is helping to shepherd borrowers through the loan modification process under President Obama’s Making Home Affordable (MHA) program. Operation Reach 1 is the only loan modification and foreclosure rescission company to be awarded an A rating by the Better Business Bureau.

Thanks to Operation Reach 1, foreclosure has not been the end for many borrowers. Calling for transparency in California’s foreclosure process, which is riddled with errors, Operation Reach has successfully negotiated the rescission of numerous foreclosures – getting homes back for homeowners after they were wrongfully sold.

Clients of Operation Reach 1 have been able to fight, prevent and avoid foreclosure thanks to the company’s vast knowledge of the foreclosure process, borrowers’ rights and the guidelines surrounding the Making Home Affordable program. In many cases, a bank’s loan modification and loss mitigation departments are marching down two very separate and parallel paths and a blaze of errors occurs due to a number of factors. By identifying these errors, Operation Reach 1 is able to prevent and rescind foreclosures.

“At Operation Reach 1, we attribute our success to our borrowers who keep copious notes and are engaged in the process from beginning to end to regain ownership of their property,” explained Denise Thomas, president of Operation Reach 1. “For many of our clients, who have been promised that their foreclosure would be suspended pending a modification review, that simply has not occurred and the trustee sale has occurred anyway. Borrowers are now fighting back with tangible evidence and winning – especially since every aspect of the foreclosure process is begging to be put under a microscope.”

“I started working on the loan modification for my 82 year-old grandfather in 2009 and was denied at the end of 2010 when the bank claimed that we failed to provide the paperwork needed to obtain his tax returns even though we had submitted them multiple times,” said Operation Reach 1 customer, Kristie Sheets. “We didn’t know where to turn – especially after working with an unethical loan modification company that took $6000.00 from us and did nothing. That’s when I contacted a real estate attorney that recommended Denise Thomas of Operation Reach 1, which took over the process; allowed me to relax with complete confidence; and successfully helped us secure a rescission and loan modification.”

“Denise Thomas is a tireless advocate for borrowers who want to stay in their home and negotiate an alternative to foreclosure through the Making Home Affordable program,” said attorney William Caspari. “Borrowers who are lucky enough to have Denise on their side can rest assured that she will work diligently on their behalf until she achieves a resolution. The foreclosure crisis is a new frontier and few know how to navigate it – Denise is one of the few that do and has.”

About Operation Reach 1

Operation REACH, CA DRE# 01210624, was formed in direct response to the mortgage crisis by female and minority professionals with 50+ years combined mortgage underwriting, risk management, quality control, and loan servicing experience. At the end of the day, when we have a family who has the opportunity to remain in their home, a lender who will receive monthly payments on time every month, and a neighborhood that reflects pride of homeownership, we have done our job. For more information on Operation Reach 1 and how we help usher borrowers through the loan modification and or rescission process, contact us at 1-888-979-4447 or visit our website at
www.operation-reach.com .

Media Contact:Andrea CorryTopMind PRandrea@topmindpr.com(925) 640-5482

SOURCE Operation Reach 1, Inc.

Copyright (C) 2012 PR Newswire. All rights reserved

Article source: http://www.marketwatch.com/story/foreclosure-process-fraught-with-errors-leads-borrowers-to-fight-back-2012-02-21

The foreclosure process has been under attack for months now. We have all heard about the faulty practices many banks used that forced many homes to be foreclosed under erroneous conditions.

To try to compensate homeowners for any irregularities, the government negotiated with five banks in an attempt to make amends for errors in the way foreclosures were handled. The result is a $25 billion settlement that is supposed to bring relief to some homeowners and give a stipend to those homeowners whose transactions were not handled properly. This is the second largest settlement in history, only behind the tobacco settlement several years ago.

Bank of America, Chase, Wells Fargo, Citigroup and Ally (formerly GMC Mortgage) have all agreed on the settlement. Nine additional banks are in negotiations.

This does not compensate in any way a homeowner for the loss of his or her home. Compensation is limited to violations with property owners’ rights. Homes were already distressed when the foreclosure process had been initiated. Banks were in reality not equipped to handle the large flow of foreclosures and were using faulty practices such as robo-signing to quickly remove the properties from their books

The funds all go to consumers; $10 billion has been set aside for principle reductions. Mortgages that meet certain guidelines have the opportunity to be reduced starting at $20,000 with a 5.25 percent interest rate. The $10 billion is set aside for foreclosure victims and $5 billion for relief programs. If errors are found in the foreclosure process, individuals could receive up to $2,000 in restitution. Military victims could qualify for up to $117,000. Properties affected were sold between Jan. 1, 2008, and Dec. 31, 2011.

Washington is set to receive $648 million:

• $455 million for principal reduction
• $70 million to assist refinance programs
• $45 million for foreclosure victims
• $24 million for foreclosure relief programs

Homeowners should not expect a quick resolution. Banks are expected to take between six and nine months to determine eligibility.

Banks have been reluctant to put foreclosed properties on the market during the negotiations with the government and before new guidelines were in place to prevent any errors in the future. With the agreement, it is expected that there will be a surge in foreclosed properties on the market. This probably will have a downward effect on home prices.

Mathew Gardner of Gardner Economics reported his calculations on the status of distressed properties in his Seattle Housing and Economy Report on Feb. 14. In 2009, foreclosures in King County reached 19.9 percent. Foreclosures in the fourth quarter of 2011 rose to 35.4 percent. The Eastside reached a 26.1 percent level in 2011.

Snohomish County has 50.9 percent of its total transactions in the distressed category.

Gardner is slightly optimistic about the future of the job market. He believes that the private sector is responsible for the unemployment rate registering at least a point lower than national averages.

Hopefully, with inventory presently at very low levels and prospects for the job market to improve in the next year, these properties can be sold quickly. Only when the majority of these homes are off the market will we see a true increase in home values.

Joan Probala is a managing broker for Windermere Real Estate. She has 30 years of experience in real estate, construction and sales.

Article source: http://edmonds.patch.com/articles/settlement-for-faulty-foreclosure-practices-may-affect-housing-market

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Article source: http://www.theledger.com/article/20120220/NEWS/120229946/1374?Title=Foreclosure-Measure-Advances-in-Senate

PARSIPPANY, NJ–(Marketwire – Feb 21, 2012) – A recent survey over 600 Coldwell Banker Real Estate professionals in the United States revealed home buyers and sellers are adjusting expectations and “getting real” about real estate in 2012. More than half (51 percent) reported that sellers are more willing to price their homes more competitively than this time last year, and 45 percent said sellers are more willing to change the appearance of their homes to entice buyers than they were one year ago.

Sellers More Willing to De-clutter, De-personalize and Make Repairs

Of those Coldwell Banker professionals surveyed:

• 94 percent say their sellers are getting rid of clutter and making cosmetic updates, such as fresh paint and minor repairs.
• 78 percent agree clients are willing to “de-personalize” the home.
• 59 percent say sellers are even bringing in new home decorations or furniture to help make the home more appealing.

“De-personalizing and making it easy for a buyer to imagine him or herself living in the property is crucial, especially when there are many homes on the market,” says Jessica Edwards, Coldwell Banker Real Estate Consumer Specialist. “Within the past year, Sellers were more willing to price their homes competitively and took my advice to make their home inviting and appealing to a broad cross-section of potential buyers.”

Buyer Preferences are Back to the Basics

Sellers, take note: when it comes to selecting a home, buyers are going back to the basics. They value new or updated kitchens, bathrooms and open floor plans as the most important features for a new home.

• 33 percent of surveyed agents say that a new or updated kitchen is the most important feature to homebuyers.
• 14 percent say the most important feature to homebuyers is an open floor plan, while 12 percent say it is a new or updated bathroom.
• Only 1 percent of the real estate professionals surveyed say they believe that entertainment rooms or finished basements are the most important feature.

Home Buyers Moving for Babies and Careers

The survey also drilled down into which life events are motivating the most people to buy homes. According to the Coldwell Banker Real Estate professionals surveyed, growing families and job relocation are currently the biggest drivers for home buyers in the U.S.

70 percent of real estate professionals say a new baby or growing family is the “most common,” or a “very common” reason buyers search for a new home.

• 69 percent say relocation for job reasons.
• 59 percent say marriage.
• 48 percent say divorce.
• 37 percent say retirement.

“The survey shows that today’s buyers are recognizing the true value of a home,” says Budge Huskey, president and chief operating officer, Coldwell Banker Real Estate LLC. “This shift is critical as we return to the home serving as an investment in our lifestyles where the emotional and psychological benefits are of at least equal value to the pure economic investment.”

Survey Methodology: Coldwell Banker Real Estate conducted an online survey among 691 Coldwell Banker real estate professionals across the United States about housings trends in 2012. The survey was fielded between January 24 and February 7, 2012.

The base (sample size) for calculating results varies slightly from question-to-question. The approximate sample size answering each question was 615. Maximum error range based on this sample size — at a 95% level of confidence — is +/- 4 points. Note that standard error calculation applies to random probability samples and is included herein to serve as a guide-only.

*Some answer percentages in the above may not total 100 percent, if only the most popular responses are listed. In other cases, respondents had the option to check all that apply, which may mean that percentages total more than 100 percent.

About Coldwell Banker^®

Since 1906, the Coldwell Banker^® organization has been a premier provider of full-service residential and commercial real estate. Coldwell Banker is the oldest national real estate brand in the United States and today has a network of nearly 87,000 sales associates and brokers working in approximately 3,100 offices in 49 countries and territories. The Coldwell Banker brand is known for creating innovative consumer services as recently seen by being the first national real estate brand to augment its web site www.coldwellbanker.com for smart phones, the first to create a iPhone application and the first to fully harness the power of video in real estate listings, news and information through its Coldwell Banker On Location(SM) YouTube channel. The Coldwell Banker system is a leader in specialty markets such as resort, new homes and luxury properties through its Coldwell Banker Previews International^® marketing program. Coldwell Banker Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated.

Article source: http://www.marketwire.com/press-release/coldwell-banker-real-estate-survey-reveals-sellers-more-willing-price-competitively-1621843.htm

Thanks for the update. It is grossly negligent for Attorneys General to be pushing this as a success, when it hasn’t been approved by the judge. Seems like the AGs should have a bit more respect for the law.

Additionally, they all threw away their negotiating positions of strength by coming out in public saying there’s a completed deal. The banks know they can play hardball, since the AGs will look like idiots if the deal falls apart.

Good going, Kroger, you’re an idiot.

If laws were broken, people should be going to jail, and corporations barred from doing business in the state (have their charters revoked).

Article source: http://www.oregonlive.com/front-porch/index.ssf/2012/02/unanswered_questions_in_states.html

Millions of borrowers who suffered financial losses from foreclosure abuse now have two ways of getting compensated.

NEW YORK (CNNMoney) — Millions of borrowers who suffered financial losses because their mortgage lenders played fast and loose while processing their foreclosures now have two ways of getting a payback.

They can tap the $26 billion settlement between the state attorneys general and the nation’s five biggest banks that was inked two weeks ago.

But there is also an earlier settlement that has been nearly forgotten — and that could lead to an even bigger payoff, in some cases.

As part of an enforcement action by federal authorities last April, 14 mortgage servicers, including Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500), Citibank (C, Fortune 500), HSBC (HBC), MetLife Bank (MET, Fortune 500), PNC Mortgage (PNC, Fortune 500) and Wells Fargo (WFC, Fortune 500), agreed to hire independent consultants to investigate foreclosure abuses and compensate those who suffered financial harm.

As a result of the program, up to 4.3 million mortgage borrowers who were foreclosed on in 2009 and 2010 will have a chance to request an independent review of how their foreclosure was handled.

So far, only 90,000 eligible homeowners have submitted claims, prompting the feds to extend the deadline for applications by three months to July 31.

The exact amount of money borrowers will receive has yet to be determined. But if a review finds that “financial injury” occurred — say a bank charged inappropriate fees or it went forward with a foreclosure without a valid claim to the property — a homeowner could be repaid in full for their losses.

Borrowers who were improperly charged even just a single fee could be repaid for it, according to Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency, one of the federal regulatory agencies that negotiated the agreement.

And borrowers who suffered much larger losses could be in line for much bigger repayments than promised by the AG’s settlement, which will pay up to $2,000 to the estimated 750,000 who lost their homes to foreclosure between 2008 and 2011.

The compensation could even repay the cost of regaining a wrongfully lost home if warranted by the facts of the case, according to Hubbard.

The Independent Foreclosure Review was sparked by the robo-signing scandal that exposed the bank’s treatment of borrowers in the foreclosure process. The lenders lost documents and recreated them, had low-level employees with no knowledge of what they were attesting to sign legal papers and bent the rules requiring them to halt foreclosures if borrowers sought mortgage modifications.

What the $26B foreclosure settlement means for you

Unlike the $26 billion settlement with the state attorneys general, borrowers didn’t have to lose their homes in order to receive compensation, according to Hubbard.

“It could be anyone who suffered financial loss because of errors made in the foreclosure process,” he said.

Since the settlements are completely independent of one another, claimants can double-dip, filing for compensation under both settlements. (To seek compensation under the state attorneys general settlement, contact your lender or servicer and ask them to review your case).

To make a claim for the Independent Foreclosure Review, borrowers have to fill out a five-page form that identifies some examples of situations that may have led to financial injury. Borrowers do not have to provide documentation. That will be handled by an independent agency.

No reviews have been completed yet, according to Hubbard. And individual cases may take months to come to decision.

For more information on the forms, go to the website set up by the servicers. And for a full list of the mortgage services involved in the Independent Foreclosure Review, go to the Federal Reserve website 

Article source: http://money.cnn.com/2012/02/20/real_estate/foreclosure_review/