The federal government will allow close to 4.5 million homeowners to have their foreclosures reviewed and some of will be eligible for restitution, according to USA Today.
Next month the federal government will begin sending out the first round of letters to foreclosed homeowners that will inform them if their cases are eligible for review. Homeowners, who did not contest the bank aided by a foreclosure attorney, may be compensated by major mortgage lenders.
The reviews will be conducted on properties that were foreclosed between 2009 and 2010 and were serviced by the country’s 14 largest mortgage lenders. The reviews will take months to conduct and will award restitution to homeowners based on injury, according to John Walsh, acting Comptroller of Currency.
The reviews are part of a larger action taken against the banks that were found to have weakness in their mortgage servicing practices. The negligent mortgage servicing practices of larger banks is thought to have caused a number of wrongful foreclosures. Some of these homeowners were able to avoid seizure by employing a foreclosure lawyer, but others lost their homes.
Restitution will be required if a home was seized for a variety of issues which include paying impermissible fees or penalties, paid too much or submitted misapplied payments, were wrongfully denied modification or were wrongfully foreclosed, according to USA Today.
A person who was wrongfully charged or foreclosed may have been able to fight with the assistance of a foreclosure attorney, but many people chose not to fight. These individuals will now have another course of action and can obtain a sense of justice.
