Wednesday, November 2, 2011

Foreclosure; robo-signing; mortgage servicers; settlement; banks - latimes.com

Foreclosure; robo-signing; mortgage servicers; settlement; banks - latimes.com

Aggrieved homeowners ensnared by a foreclosure system riddled with misconduct and error are set to get their first shot at winning some cash back from the banks.

Under orders from federal regulators, 14 mortgage servicers on Tuesday began mailing out 4.3 million letters to potential victims of wrongful foreclosure practices. The letters will invite borrowers to submit their cases for a free review by independent consultants that are funded by the lenders but vetted by regulators.

Borrowers may be compensated if the reviewers and regulators find that the homeowners were harmed financially.

"These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices," said John Walsh, acting comptroller of the currency, whose agency regulates the nation's largest banks. The Federal Reserve has also issued the enforcement orders.

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