Fixing U.S. Foreclosures May Take a Year: Regulator

MarketWatch (09/23/11) Zibel, Alan
The costly and time-consuming process of sorting through foreclosure documents and fixing improper foreclosure practices may take U.S. banks at least another year, according to John Walsh, acting head of the Office of the Comptroller of the Currency. Regulators ordered major banks and thrifts to overhaul their foreclosure practices last spring after finding that lenders filed foreclosures without the correct documentation and without sufficient staff to properly deal with distressed borrowers. Banks are now working with independent consultants to identify any borrowers who may have been negatively affected by these foreclosure-processing problems, a process which has become lengthier than expected. “It would be great if it could be completed more quickly, but it’s important that it be done correctly and in a way that assures fair treatment for homeowners,” Walsh stated. Regulators are also requiring banks set up a single process for borrowers who want their case reviewed. The effort, expected to be launched in several weeks, will include a joint website, toll-free number and advertising campaign.