Foreclosure reviews could take another year

A review of about 4.5 million foreclosures from 2009 and 2010 from the nation’s banks could take “another year and more,” according to top federal official.

John Walsh, acting head of the federal Office of the Comptroller of the Currency, said 14 major banks will be reaching out to borrowers who may have been wrongly foreclosed upon and are fixing their foreclosure protocols over the next year.

Last spring, regulators ordered banks to overhaul their foreclosure practices after several problems were uncovered in processing and filing errors. Since then, banks have been working with independent consultants to identify borrowers who may have been wrongly foreclosed upon.

Banks are setting up a single process for consumers who would like to request a review of their case from 2009 and 2010. An outreach campaign, expected to launch in the coming weeks, will include a toll-free number, a joint website, and an advertising campaign in an attempt to reach out to affected home owners.

“We have pursued this matter aggressively because correcting improper practices in foreclosure processing and mortgage servicing is of the utmost importance for the safely and soundness of the banks, for the financial health of home owners, and for recovery in the U.S. housing sector,” Walsh said. “The reputation of the entire industry has suffered.”