05/24/2012 05:22 pm ET

Foreclosure Review Program Is Encouraged By Fed In New Video

To steer homeowners toward a little-used foreclosure review program, the government is harnessing the power of YouTube.

The Federal Reserve released a video Wednesday encouraging people to check out the Independent Foreclosure Review, a resource for borrowers who were in foreclosure in 2009 or 2010 and who believe there may have been errors in the handling of their case.

Plenty of Americans might fit that bill -- but relatively few have done anything about it. Mortgage servicers have mailed out application paperwork to at least 4.3 million borrowers in the past seven months, but only 3 percent of those people have actually applied for a review.

Not everyone who's received an application is necessarily a victim of a mishandled foreclosure. But the problem of robo-signing -- which involved mortgage industry employees falsifying documents and processing paperwork without reading it -- has reportedly been prevalent for years. It's also possible that some homeowners who experienced foreclosure in 2009 or 2010 are not aware they are eligible for compensation.

The amount of money a homeowner could potentially collect as a result of a mismanaged foreclosure is unclear. A spokesman for the Office of the Comptroller of the Currency, one of the government agencies that established the IFR, told reporters in February that the program could pay out as much as the cost of a lost home in some cases.

The IFR -- which is overseen by federal bank regulators -- is only looking at cases from customers of certain mortgage servicers, including Bank of America, Chase, Citibank and Wells Fargo. A full list can be found on the IFR website.

The deadline for applying to the IFR is July 31.