The recent $26 billion foreclosure abuses settlement has been getting a lot of attention, but time is running out to obtain relief under another action that could potentially help even more former homeowners.

Borrowers whose homes were subjected to a foreclosure action in 2009 or 2010 are entitled to request an independent review to determine if those actions were done appropriately. They may be entitled to compensation if it is found they suffered financially due to errors, misrepresentations or other shortcomings in the lender's foreclosure process.

To receive help, however, they must submit a request by July 31, 2012. Over 4 million borrowers may meet the initial requirements for eligibility.

About The Independent Foreclosure Review

The Independent Foreclosure Review is the result of a federal consent order directed at 14 banks and other mortgage servicers. Homeowners need not actually have lost their homes to foreclosure to be entitled to compensation; the home may have been improperly referred for foreclosure, resulting in financial injury to the homeowner, without the foreclosure process being completed.

To meet initial eligibility requirements, a borrower's primary residence must have been in the foreclosure process during 2009 or 2010 and their mortgage must have been serviced by one of the 14 mortgage companies named in the consent action. Borrowers may still be eligible even if the mortgage was later brought current or the property was surrendered via a short sale or deed-in-lieu before the foreclosure process was completed.

Examples of qualifying situations

Situations that may have resulted in financial harm include being foreclosed on while being considered for a loan modification or while following the terms of a modification agreement; not being properly credited for mortgage payments, being subjected to improper fees, being foreclosed on while under bankruptcy protection, or when exempted due to active military service. Other situations may qualify as well.

Potentially eligible borrowers were to have been notified by mail by the end of 2011; however, persons who were not notified and believed they may be eligible can obtain more information, including a list of mortgage servicers involved, at http://independentforeclosurereview.com. The consent order is being carried out under the authority of federal bank regulators, the Treasury Department and the Federal Reserve, among others.

Published on February 21, 2012