The Federal Reserve Board has announced that borrowers who believe they were financially harmed during the mortgage foreclosure process by four institutions in 2009 and 2010 can request an independent review and potentially receive compensation.
The four large mortgage servicers supervised by the Fed – GMAC Mortgage, HSBC Finance Corp., SunTrust Mortgage and EMC Mortgage Corp. – are required to conduct this program as part of their compliance with enforcement actions issued by the Federal Reserve in April. Under these actions, servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes. A number of servicers supervised by the Office of the Comptroller of the Currency must also conduct the program.
Borrowers are eligible for a review if their primary residence was in the foreclosure process in 2009 or 2010, whether or not the foreclosure was completed. Independent consultants retained by the servicers will conduct the reviews, and the Federal Reserve says that it will supervise the review process and monitor the implementation of the program and the servicers' outreach efforts.
Borrowers seeking recourse must put forward their requests for review by April 30, 2012.