Independent consultants would assess if borrowers lost out financially “through errors, misrepresentations or other deficiencies in foreclosure practices,” the Office of the Comptroller of the Currency said Tuesday.
Where that is the case, the consultants would determine what compensation should be paid.
The action covers foreclosures in 2009 and 2010 and requires lenders to send out letters to borrowers explaining how they can have their cases reviewed.
Authorities have also set up a website at www.IndependentForeclosureReview.com.
HSBC was told “to address a pattern of misconduct and negligence” related to foreclosure processing.
Earlier Tuesday, the Fed announced that customers of four major lenders — GM’s mortgage arm GMAC, HSBC, SunTrust and EMC — could seek compensation if their homes were unfairly repossessed in 2009 and 2010.
“Borrowers who believe they were financially harmed during the mortgage foreclosure process by four institutions in 2009 and 2010 can now request an independent review and potentially receive compensation.”
“Servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.”