Mortgage borrowers with homes that were foreclosed on between 2009 to 2010 are eligible for an independent review, the U.S. Treasury Department's Office of the Comptroller of the Currency (OCC) announced on Tuesday.
Over 4 million mortgages are eligible because of possible errors and deficiencies in the servicing and foreclosure process. Errors include inaccurate balances recorded, foreclosure actions moving forward despite personal bankruptcy and inaccurate fees. Borrowers could be eligible for financial compensation, although the amount of compensation hasn't been determined.
"The independent foreclosure review is a significant component of the mortgage servicers' compliance with our enforcement actions," said John Walsh, acting Comptroller of the Currency, in a statement. "These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices identified in our enforcement actions."
Fourteen large mortgage servicers, including Bank of America, Chase, Citibank and Wells Fargo, are covered by the enforcement actions. The OCC has opened a Web site for borrowers to submit claims, with a deadline of April 30, 2012.
Independent consultants will conduct the reviews, with oversight from the OCC and other federal regulators. Reviews are expected to take a few months to complete, because of the large number of borrowers eligible for review.
"The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system," said Walsh.
Write to Roland Li at r.li@IBTimes.com