11/12/2012 12:58 pm ET Updated Jan 12, 2013

Racial Inequality and the Independent Foreclosure Review


In the aftermath of our recent foreclosure crisis, it's difficult to overstate what a pernicious effect predatory lending has had on minority families. By buying up subprime mortgages targeted at minorities, Wall Street firms rewarded and propped up systematic racist lending practices, all but ensuring that Black and brown families would be in the worst possible position when the financial crisis hit.

When the housing market collapse triggered a wave of foreclosures, it wiped out decades of economic gains among African-American and Hispanic communities. True economic reform requires that both Wall Street firms and predatory lenders face harsh consequences for their actions. Victims of predatory lending should also receive loan restructuring assistance, loan forgiveness and other forms of compensation.

To that end, federal agencies have created a free program -- called the Independent Foreclosure Review -- to help families whose homes were wrongfully foreclosed. All victims of the housing bubble should be aware that they may be entitled to thousands of dollars in compensation under this program. If your home faced foreclosure between Jan. 1, 2009, and Dec. 31, 2010, and if your lender was one of the 14 listed on the Independent Foreclosure website, then you may be able to suspend foreclosure on your home, correct a bad credit report, modify your loan or receive compensation.

Some of the most common bank errors include:

-- The mortgage balance amount at the time of the foreclosure was more than you actually owed.

-- You were doing everything the modification agreement required, but the foreclosure sale still happened.

-- The foreclosure action occurred while you were protected by bankruptcy.

-- Fees charged or mortgage payments were inaccurately calculated, processed or applied.

To qualify for compensation, you must submit an application requesting a free review -- the deadline is Dec. 31, 2012. Improve your chances of a favorable ruling by filling out the application as thoroughly as you can. Remember: your review is free. Beware of scammers asking for money. If you need a form or have questions about the program, visit or call (888) 952-9105.

Dedrick Muhammad is the senior director of the NAACP Economic Programs. To learn more about preventing foreclosure and personal finance, check out the NAACP Financial Freedom Center Facebook Page or on Twitter @naacpecon.