(Reuters) – Homeowners who believe they were wrongly foreclosed upon will soon be able to request that their cases be reviewed as part of a government settlement with large lenders, a top bank regulator said on Monday.
As part of a settlement announced in April, 14 large mortgage servicers, including Bank of America Corp and JPMorgan Chase & Co, are required to hire independent consultants to review any foreclosures initiated in 2009 and 2010.
The goal is to identify foreclosures that were not properly handled by the banks so that these homeowners can be compensated for any financial harm.
Bank regulators have ordered the lenders to set up a single system where borrowers can request that their specific case be reviewed to ensure anyone with a grievance is not missed.
That system will be up and running in a few weeks, Acting Comptroller of the Currency John Walsh said on Monday.
“As we explored the best means of ensuring that injured homeowners had the opportunity to seek relief, it became clear that what was needed was a robust, transparent and accessible complaint process that will give borrowers the opportunity to request an independent foreclosure review,” Walsh said in a speech at a conference hosted by The American Banker.
The consultants hired by the banks, with the approval of regulators, will launch an advertising campaign to reach out to borrowers and a common website will be created where complaints can be filed, Walsh said.
The government for months has been probing banks and other firms for shoddy mortgage practices, including the use of “robo-signers” to sign hundreds of unread foreclosure documents a day.
Along with the banking regulators, the Justice Department and states are also negotiating with banks over their foreclosure problems.
Bank regulators moved first in April and have said the consultants’ reviews will be used to determine what type of fines large banks and other mortgage servicers will have to pay for past problems.