Regretfully, most lenders do report a borrower late although they are modifying or refinancing the loan. This has caused litigation and lenders have been found wrongful in their practices routinely.
As reported by CNNMoney:
Homeowners who were victims of foreclosure abuses during
2009 and 2010
could receive more than $125,000 from lenders as part of an Independent Foreclosure Review that is being overseen by two government agencies.
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve laid out the framework in which borrowers will receive compensation for a wide range of foreclosure abuses and errors that occurred as a result of robo-signing.
As part of an enforcement action by the agencies last April, 14 mortgage servicers, including Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500), Citibank (C, Fortune 500), HSBC (HBC), MetLife Bank (MET, Fortune 500), PNC Mortgage (PNC, Fortune 500) and Wells Fargo (WFC, Fortune 500), agreed to hire independent consultants to investigate foreclosure abuses and compensate those who suffered financial harm.
The review is separate from the $26 billion foreclosure abuse settlement between the nation's five largest lenders and attorneys general from 49 states and the District of Columbia. Under that deal, the banks promised to reduce the principal on loans held by underwater homeowners, refinance some mortgages to lower interest rates and compensate those who lost their homes due to improper foreclosure practices.
The Independent Foreclosure Review, which is being carried out on a federal level, has gotten far less attention. So far, only a fraction of the 4.4 million borrowers potentially eligible for review have responded to solicitation letters sent out by the banks informing them that they are eligible for a review by an independent consultant and may be compensated. As of May 31, only about 340,000 cases were slated for review, according to a progress report released Thursday by the Fed and the OCC.