The program, which covers foreclosures initiated, pending or completed during 2009 or 2010 has helped less than 6 percent of all those who are potentially eligible, with the cut-off date set for the end of this year. Moreover, as of June, only 11,000 reviews had been completed, and, as 2012 comes to a close, none of these homeowners has yet received compensation.
Compared to the magnitude of the crisis, these results are disappointing – and cry out for action by the federal regulators who created the Independent Foreclosure Review but failed to conduct effective outreach to the millions of hard-pressed households who could benefit from it.
Literally millions of low and moderate income homebuyers – many of them African American or Latino – have been subjected to abuses such as being shunted into subprime mortgages, charged exorbitant rates and fees, and then subjected to mishandled foreclosures, sometimes even when they were making payments on a loan modification.
While there have been various legal settlements for homeowners who have been wrongly foreclosed, the Independent Foreclosure Review is one of the most large-scale and promising programs.
Created by the Federal Reserve Board and the Office of the Comptroller of the Currency in 2011, the program applies to mortgages that were serviced by 27 leading companies and went into foreclosure during 2009 and 2010 – a period when foreclosure practices were particularly suspect for mishandling and wrongdoing.
The idea behind the review was well-founded and long-overdue: Offer homeowners who had suffered from inept or abusive practices the opportunity to have independent examiners review their cases and determine whether they deserve compensation (anywhere between $500 and $125,000).
But the Independent Foreclosure Review could work only if struggling homeowners knew about it, and, unfortunately, its outreach efforts so far have been a miserable failure.
In a report released in June, the US Government Accountability Office (GAO) found that these outreach efforts fell far short of what is required to motivate and mobilize more than 4 million homeowners who may already have been victimized by mistaken or deceptive mortgage practices.
Among other shortcomings, the GAO found that the federal agencies involved in the program did not conduct readability tests or focus groups for their informational materials, produced materials that were too complex, devoted insufficient attention to limited-English borrowers, made inadequate use of community groups to explain the program to their constituents.
While the Federal Reserve Board and the Office of the Comptroller of the Currency have responded to the report by extending deadlines and taking important actions to improve their outreach, time is once again running out for the Independent Foreclosure Review to enroll eligible participants – and for struggling homeowners to make the most of this opportunity.
That is why these federal regulators should act now by extending the deadline and allowing for rolling applications to continue for as long as needed, or else by automatically enrolling all 4.4 million potentially eligible borrowers who have been identified.

If you have been invited to participate or believe that you are eligible, you can request an independent review may be requested online, or call 1-888-952-9105 for more information.
Most of all, this crisis demands a sense of urgency. Federal regulators and public policymakers need to understand that the housing crisis is not over, that people are still suffering, and, that even in the aftermath of the financial crisis and in the midst of the economic doldrums, hard-working families still deserve a fair chance for the American dream of homeownership.
After all, the American Dream must not expire on December 31.
Vissa is Community Reinvestment Director for the Greenlining Institute, a national policy, organizing, and leadership institute working for racial and economic justice, based in Berkeley, California.