Nearly 165,000 borrowers have filed requests for reviews on how their servicer treated them in foreclosure—to see if they are entitled to damages—according to new figures released by the Office of the Comptroller of the Currency.
In addition, independent consultants hired by 14 servicing megabanks and approved by regulators have identified 142,000 loan files where errors or mistakes in the foreclosure process may have caused financial harm to borrowers. “That number will increase as the consultants identify additional files for review,” OCC spokesman Bryan Hubbard said.
In total, there are 307,000 files slated for some type of review.
The foreclosure review option is the result of servicing and foreclosure problems the OCC and other regulators discovered during on-site inspections. The reviews were prompted by reports of robo-signing practices and other short cuts servicers took to deal with a rapidly increasing number of delinquent mortgages and foreclosures.
Servicers have mailed 4.3 million letters to borrowers informing them of the foreclosure review process and how to apply. Servicers have completed two rounds of advertising and a third round is scheduled before the July 31 deadline for filing review requests.
The OCC is presently conducting a second round of public service announcements.
Although the initial response has been low, regulators are mainly focused on increasing public “awareness and ensuring the reviews are conducted in a fair and impartial manner,” the OCC spokesman said.