Disappointed with the federal effort to reach the more than 4 million homeowners affected by the foreclosure crisis, a number of housing advocates are calling on the government to drop the Dec. 31, 2012, enrollment deadline for independent review of their cases, because the review program has so far reached only a fraction of those potentially eligible to receive compensation.

According to the Greenlining Institute, which held a phone briefing for the press recently, about 4.4 million borrowers went into foreclosure during 2009 and 2010 and many of those were improperly foreclosed on by servicers. However, only about 260,000 have responded to the review program. The reviews could potentially return borrowers from $500 to $125,000.

The Independent Foreclosure Review (IFR) was created by the Federal Reserve Board and the Office of the Comptroller of the Currency in April 2011 to address evidence of widespread mishandling of home foreclosures, according to the Greenlining Institute, a multi-ethnic policy research and advocacy institute.

“The program applies to mortgages that were serviced by 27 leading companies and went into foreclosure during 2009 and 2010—some 4.4 million mortgages. The latest figures available indicate only about six percent of those eligible—260,000—have begun the process of having an independent review of their foreclosures to determine whether they deserve compensation for mistakes or abusive practices. So far, not one decision has been made and no compensation has been given.”

The servicers include Bank of America, Chase, Countrywide, Wells Fargo and other banks and servicers, said Greenlining Institute Community Reinvestment Director Preeti Vissa.

“If they [borrowers] go through the process and wrongdoing is found, there are a host of ways they can be provided compensation,” said Vissa, including corrections of their credit report. “There could be potentially lots of money on the table to those who have been harmed.” She called the review program up to this point a failure, because federal regulators had done a poor job outreaching to communities.

“We’re calling on officials to drop the deadline and allow rolling applications for as long as needed,” said Vissa.

The Independent Foreclosure Review allows eligible current and former homeowners to have their foreclosure files reviewed by independent consultants. Homeowners who were financially harmed by abuses or errors of their mortgage servicers will be eligible for compensation.

As of September 2012, only 18 percent of eligible homeowners in California had responded to the mailing about the review. Nationally, the response rate is only 7 percent.

According to Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, who spoke at a recent briefing for ethnic media hosted by New America Media with support from the San Francisco Foundation, “There was almost no outreach to people of color or immigrants.”

"Fully addressing the fallout from bank misconduct in the foreclosure crisis is crucial to our economic recovery, and to families across America," said Alan Jenkins, executive director of the Opportunity Agenda. "We cannot let arbitrary deadlines prevent us from rebuilding the American Dream."

“Every day our housing counselors talk to families that are hurting because of foreclosures, and very few seem to have heard of this program,” said Tunua Thrash, executive director of the West Angeles Community Development Corp. in Los Angeles. “It’s not fair to slam the door on people before they even know help is available.”

Any homeowner whose primary residence was at some stage of foreclosure any time in 2009 or 2010, and who used a mortgage servicer on the Independent Foreclosure Review’s list of servicers and affiliates, is eligible for a review. Homeowners who did not actually lose their homes to foreclosure are still eligible to apply. Compensation plus equity will be determined by how much the homeowner was financially harmed during the foreclosure process. In the most severe cases, the foreclosure can be rescinded.

Homeowners who did not receive the review form, can call (888) 952-9105 or apply online: www.independentforeclosurereview.com. To insure that your application is properly processed, applicants should have their loan number, the last four digits of their Social Security number, and any documentation that would substantiate financial harm during the foreclosure process.

You can contact a U.S. Department of Housing and Urban Development approved housing counselor at (800) 569-4287. They may be able to help you with your lender. Additionally, you can contact HOPE NOW or call the Homeowners Hope Hot Line at (888) 995-HOPE to ask for assistance in working with your lender.