The Fed’s latest: the Borrower Outreach Program

The Federal ReserveThe central bank in control of regulating the U.S. financial and monetary system. Board of Governors (the Fed) is checking up on mortgage lender compliance with regulations controlling foreclosure misconduct the Fed identified at ten banks (including Bank of America, Wells Fargo, JP Morgan Chase and Citibank) during the Fed’s November 2010 foreclosure review.

In addition to requirements issued in April 2011, each of the ten lenders must now participate in the Borrower Outreach Program — a process designed for the receipt and review of homeowner complaints and inquiries.

The program, announced in November 2011, gives homeowners the opportunity to have their foreclosure independently reviewed for lender errors or misrepresentations in noncompliance with state and federal foreclosure laws. Each lender must hire a Fed-approved independent consultant to review individual foreclosure actions and determine whether homeowners suffered financially as a result of lender errors or misrepresentations. Lenders will then submit their plans to correct errors and prevent future misconduct for Fed approval.

As always with federal mortgage rules, a window period exists to restrict consumer participation. Only those homeowners whose primary residence was in foreclosure during 2009 or 2010 may request their file be reviewed, whether or not the foreclosure was completed. Homeowners with current issues about foreclosures started after 2010 need not apply.