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Foreclosure review could give compensation to borrowers

The financial crisis of 2008 and its continuing aftermath have hit states like South Carolina hard. Homeowners in particular have found themselves struggling to make their mortgage payments in addition to paying for food, utility bills and other necessary items. Too often they find themselves facing foreclosure through no fault of their own. But there has nonetheless been some good news recently on this front.

During the recession, not all banks followed proper foreclosure procedures. For example, some simply "robo-signed" documents or did not send the required documents to the client. These were improper tactics and they have landed 14 banks in hot water with federal regulators, who will now subject them to independent reviews on foreclosure cases from 2009 and 2010.

If a bank is found to have acted wrongfully in a foreclosure case, then the affected resident could be entitled to compensation. In fact, the Neighborhood Housing Corporation estimates that thousands of former homeowners will be able to collect compensation. Of course, those monetary damages are but a small consolation for losing a home due to a bank's improper behavior.

For others, South Carolina now offers a program called SC Help that can provide assistance to homeowners who are in fear of losing their home. Additionally, it is important to keep in mind that foreclosure options are available, such as negotiating with a mortgage lender to modify payments or even shave off a few years. When a home is foreclosed, no one wins, so it is often in a bank's best interest to reach a deal. An experienced attorney could help in deciding the best path to take.

Source: WSPA 7, "Foreclosure Vicitms Could Get Compensation," Diane Lee, Nov. 7, 2011

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