Posted on: 09th Apr, 2013 11:43 pm
Recently, the regulators have revealed that around one-third of all foreclosures, that took place between 2009 and 2010, were the results of bank errors. There were around 1.2 million borrowers, amongst the 3.9 million households whose properties were foreclosed, who had to fight a tough battle against 11 leading financial organization in order to rectify the errors. As per the government data, around 244,000 of those borrowers eventually lost their homes.
Let's check out some of the facts in this regard:
Let's check out some of the facts in this regard:
- Around 700 borrowers, who had to go through foreclosure proceedings, had never defaulted on their mortgage payments.
- Nearly 28,000 households, who went through foreclosure proceedings, were protected under federal bankruptcy laws.
- Around 1,100 borrowers fulfilled the required criteria of the forbearance plans as promised to them by the mortgage companies but still faced foreclosure.
- Some 1,600 borrowers, who faced foreclosure, were actually protected by the Servicemembers Civil Relief Act of 2003. Under this Act, mortgage companies need to cap interest rates and follow special procedures when foreclosing on homes of active-duty members of the armed forces and their families.
- Around 1.1 million borrowers faced foreclosures due to “Dual Tracking wherein the lender repossessed home though the borrowers were either making payments through a modification plan or were granted reprieve.
Thanks for sharing the facts, Sara!!
The foreclosure reviews threw light on the malpractices done by the lender to recover their dues. Most of us may remember the fact that in the year 2010, when the errors came into forefront, most of the financial institutions stopped repossessions. As the abuses came to light, around 11 financial institutions agreed to settlements with the state authorities as well as federal regulators. As per the settlement, all these financial institutions are finally going to pay around $3.6 billion to nearly 4 million borrowers who faced wrongful foreclosures. Checks will be mailed to the borrowers from the 2nd-3rd week of April, 2013.
The foreclosure reviews threw light on the malpractices done by the lender to recover their dues. Most of us may remember the fact that in the year 2010, when the errors came into forefront, most of the financial institutions stopped repossessions. As the abuses came to light, around 11 financial institutions agreed to settlements with the state authorities as well as federal regulators. As per the settlement, all these financial institutions are finally going to pay around $3.6 billion to nearly 4 million borrowers who faced wrongful foreclosures. Checks will be mailed to the borrowers from the 2nd-3rd week of April, 2013.
It should be noted here that the foreclosure review has cost around $2 billion to the financial institutions. This has also led to the accusations from the Congress that the regulators had bungled the process. Apart from that there were accusations that the banks did not keep proper records. Also, it was alleged that consultants and audit firms, hired to undertake the review, billed the banks for inadequate work. As a result, the OCC and the Fed were criticized for these flaws.
However, the regulators have defended themselves by claiming that a proper extensive review was necessary to find out the borrowers who were wronged. Due to the extensive review, the settlement will achieve the ultimate goal – compensating all the aggrieved borrowers faster! On the other hand, the consultants claimed that they were only following the orders of the regulators.
Now, the Senate banking Committee will examine the role of the consultants in their next hearing.
However, the regulators have defended themselves by claiming that a proper extensive review was necessary to find out the borrowers who were wronged. Due to the extensive review, the settlement will achieve the ultimate goal – compensating all the aggrieved borrowers faster! On the other hand, the consultants claimed that they were only following the orders of the regulators.
Now, the Senate banking Committee will examine the role of the consultants in their next hearing.
Well, the private consultants and federal regulators are now facing a fresh charge in Washington – creating a bureaucratic mess which deferred relief to the home owners who went through foreclosures. This new report has been compiled by the Government Accountability Office and takes a dig at Office of Comptroller of the Currency and Federal Reserve. Apart from this, the Senate Banking Committee is also going to review the actions of firms like Promontory Financial and Deloitte & Touche regarding the quality of the work that they had done in case of foreclosure reviews.
Foreclosure review is indeed a very commendable effort to give justice to the borrowers who suffered not beacuse of their own wrongdoings. The borrowers were the victims of the errors committed by the lenders and some unjustifiable mortgage practices. Compensating these ill-fated borrowers is indeed a true damage controlling act.
What is the MInimum interest that can be charged on a 3-5 year private mortgage?
Hi robert,
Well, in order to know the rates, you will have to speak to a private lender.
Well, in order to know the rates, you will have to speak to a private lender.