New GAO Report: FORECLOSURE REVIEW
Opportunities Exist to Further Enhance Borrower Outreach Efforts
Selected Excerpts from the GAO Conclusions:
Readability tests of the outreach letter, request-for-review form, and website indicate that a high school or even a college reading level may be required to understand them. The initial communication materials were not available in languages other than English.
Neither the servicers nor the regulators conducted readability testing or focus groups with the target audience of eligible borrowers, and regulators initially did not solicit input from consumer or community groups familiar with these borrowers complexity in the communication materials may prevent people from becoming sufficiently aware of the foreclosure review, and the prospect of confusing or complex forms may discourage people from participating.
Our previous reports and federal plain language guidelines indicate that whether agencies are preparing documents or requiring private sector companies to prepare them, testing communication materials is a sound practice to help ensure that the audience can understand them and use them to take action. Moreover, complexity in the communication materials may prevent people from becoming sufficiently aware of the foreclosure review, and the prospect of confusing or complex forms may discourage people from participating.
In addition… [communication materials] do not include specific information about the potential types or amounts of remediation borrowers may receive. Specifically identifying that the types of remediation may consist of such items as lump-sum payments, rescinding foreclosures, repayment of out-of-pocket expenses, or correcting credit reports could help motivate borrowers to respond.
Finally, the planning, and in particular, evaluation of the borrower outreach process were based on limited analysis of eligible borrowers. Although servicers conducted some targeted outreach to African-American and Spanish-speaking borrower, in part due to feedback from consumer groups, the outreach process was largely uniform. Regulators have monitored the status of outreach activities, but have not analyzed the differences in characteristics between respondents and nonrespondents in planning the additional outreach efforts
Read report pdf: http://www.gao.gov/assets/600/592059.pdf