Independent Foreclosure Review Form is Too Complex: "Regulators and servicers are missing opportunities to enhance communication with consumers", the United States Government Accountability Office (GAO) said in a report.
The report, released June 29, evaluated the efforts of servicers to notify homeowners who may be eligible for an independent foreclosure review that they could do so. One major problem identified with current communication materials is that they are too complicated for the average reader to understand.
The June 29th 2012 GAO report reads, "Readability tests found the initial outreach letter, request-for-review form, and website to be written above the average reading level of the U.S. population, indicating that they may be too complex to be widely understood. Regulatory staff noted limitations to such readability tests and told us they discussed using plain language, but that the use of some complex mortgage and legal terms was necessary for accuracy and precision."
GAO Points Out Flaws in Regulator, Servicer Outreach Materials
A Q1 survey conducted by California housing counselors, states, "The federal Independent Foreclosure Review process represents a poor federal response to abusive foreclosure practices. 65% of counselors reported that homeowners did not know what the notice was, 53% reported that homeowners thought it was a scam, and 43% reported that homeowners either did not know what they stood to gain or did not know how to fill out the form." According to the April 12, 2012 report, a huge gap has become glaringly clear that banks making more promises to policymakers and consumers seemed to lack clear accountability on bank’s failures. The survey highlights the need for strong enforcement of the National Mortgage Settlement.
Independent Foreclosure Review Communications Have Included:
Communication materials developed by mortgage servicers with input from regulators and consultants included information about:
that the process for the foreclosure review suggested that borrowers may be eligible for compensation
Independent Foreclosure Review Communications Have Missed:
specific information about remediation so that homeowners feel like they know what to do
analyzing trends in borrowers who have not responded
if needed, taking additional steps to reach underrepresented groups.
GAO Report Summary
With strong urges from the Federal Reserve to help stop foreclosures, it is a matter much in the forefront of today's headlines that homeowners need specific information for remediation in order to proceed with requesting an Independent Foreclosure Review. The GOE's best practices strongly suggest that clarity and readability are very important. This feature is missing in many notification examples the GOE reviewed. The GOE has determined that "without informing borrowers what type of remediation they may receive, borrowers may not be motivated to participate".
NOTE: The GOA conducted their performance audit from February 2012 through June 2012 in accordance with generally accepted government auditing standards. Those standards require that the GOE plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for findings and conclusions based on audit objectives.
Jenna Thuening, a Certified Distressed Property Expert guides homeowners through the Independent Foreclosure Review process .11200 W. 78th St
Eden Prairie, MN 55334
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