Florida residents who believe they suffered from shoddy foreclosure practices have through Monday to apply for a free case review that could net them up to $125,000 if wrongdoing is found.
The program, which is overseen by the federal Office of the Comptroller of the Currency, began in November 2011 with an estimated 4 million eligibility letters mailed nationwide.
As of late September, just 3.8 percent of Floridians who were sent letters about their eligibility for the review have applied. In Palm Beach County, 50,599 residents were sent letters explaining the program, with just 1,954 responding.
Cases are eligible for review if the foreclosure was on a primary residence in some stage of foreclosure during 2009 and 2010. The foreclosure had to have been handled by one of 27 banks or mortgage servicers named in consent orders crafted in response to findings of foreclosure deficiencies. The affected servicers can be found at independentforeclosurereview.com.
Many foreclosure defense attorneys say they encouraged their clients to apply, but aren't surprised by the low turnout.
Problems contacting borrowers who may have been evicted from foreclosed homes, as well as borrower fatigue in applying for aid programs probably contributed to the limited response, they said.
"A lot of these homeowners have been promised a lot of things in the past that were never fulfilled," said attorney Ron Kaniuk, of Sachs Sax Caplan in Boca Raton. "It's the law of diminishing returns. Once you are disappointed a few times, you stop filling stuff out."
The Independent Foreclosure Review is separate from the $25 billion attorneys general settlement reached in February.
Nationwide, the return rate of borrowers responding to eligibility letters was about 5.3 percent through Sept. 27. Since then, 121,677 borrowers have applied nationwide, said Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency.
He said consultants also selected 159,000 files on their own for review.
"I would not characterize the number of requests as few," Hubbard said.
The original deadline to apply for the review was April 30. It was pushed back to July 31 and then Dec. 31.
Reviewers are looking for several problems including failure to put a homeowner on a permanent loan modification after he or she successfully completed a trial period, foreclosing on a borrower while he or she was current on payments under a loan modification, and not providing a borrower with proper notification during a foreclosure.
Remediation to borrowers can include credit fixes, reimbursement of improperly charged fees, and lump-sum payments of between $500 and $125,000.
Hubbard said he did not know the number of completed reviews, but that remediation efforts have "not yet begun."
St. Petersburg foreclosure defense attorney Matt Weidner said homeowners may have thrown out the eligibility notifications, thinking it was a scam.
"It's so difficult to distinguish what is legitimate and what is not, even a person knowledgeable in this kind of thing doesn't know what to pay attention to anymore," Weidner said.
For more information about the Independent Foreclosure Review, call 1-888-952-9105. How you can qualify for a review
Eligibility requirements include:
Must have been in some process of foreclosure between Jan. 1, 2009, and Dec. 31, 2010.
Servicer was one of 27 participating in the review. For a list, go to www.independentforeclosurereview.com.
Property is your primary residence.
Examples of financial harm that could be eligible for compensation:
The mortgage balance at time of foreclosure was more than actually owed.
You were following a loan modification agreement, but the foreclosure still happened.
The foreclosure occurred while you were protected by bankruptcy.
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