Report: Foreclosure Review Process Puts The Burden On The Borrower

As we reported earlier this week, upwards of 4.5 million foreclosed-upon homeowners are now eligible to have their case reviewed by an independent consultant. But as details of this review process trickle out, some are concerned that the scales might be unfairly balanced in favor of the lender.

ProPublica’s Paul Kiel dissects the various flaws on the new review process. First off, no one is providing a definitive list of which particular lender errors would be worthy of offering the homeowner some sort of compensation. Furthermore, it has yet to be made clear about what that compensation would end up being. Is it cash? Or maybe just a cleaned-up credit report?

Beyond that, there is also the issue of the 5-page Request for Review form that can be filed by people who believe they were given a raw deal during the foreclosure process. In addition to the standard questions the homeowner should be able to answer, there are open-ended questions like “Describe any other way in which you believe you may have been financially injured as a result of the mortgage foreclosure process,” that may require the input of someone more savvy about lending terminology and foreclosure law.

“They just know how they were treated,” says Alys Cohen of the National Consumer Law Center. “This essentially looks like a class-action case where the homeowners have no representation.”

ProPublica has a rather in-depth FAQ for anyone interested in the details of the foreclosure review process.

Flaws Jeopardize New Attempt to Help Homeowners [ProPublica.org]