Flawed Design For Letter Used To Notify Homeowners Of Foreclosure Settlement Cash Impedes Response, Say Critics; Form Too Complex, Looks "Like A Scam"

Reuters reports:

• Nothing about the letter that Keturah Miller received late last year indicated it could be worth as much as $125,000 to her. So she put it aside, forgetting about it for months until she stumbled across it while cleaning.
  
  Miller, 34, a family liaison worker with the New York City Department of Education, read it over four times. It still made no sense to her. "I can read the words, but the meaning of what they're saying? That's the confusing part for me," she said.
  
  The letter was one of 4.3 million forms sent under a flagship U .S. program to try to help people who may have experienced financial injury due to errors in their mortgage servicing. An estimated 4 million families lost their homes due to foreclosure from 2007 to 2012.
  
  So far, fewer than 5 percent of the potential beneficiaries - 214,000 - have requested a review of their cases, a number critics say confirms their suspicion that the process was designed to protect banks, not help consumers.

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• FLAWED DESIGN
  
  Miller's struggle to understand the rights laid out in her review letter may not be unique.
  
  A report released last week by the Government Accountability Office found that the letters' complex language, their omission of important information about remediation, and a failure to consider that some recipients speak or read little English could "impede some borrowers' ability to respond."
  
  Miller, who is finishing her Master's in Business Administration this year, finally called a housing counselor. "It's like it's done for a lawyer to understand, or someone who's involved with mortgage loans," she said.

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• Consumer advocates say the low numbers are indicative of the outreach's flawed design. While almost half of U.S. adults read at the level of a 13- or 14-year-old, the form is written at a second-year college level, according to an analysis by a consumer group.
  
  The letters and the review's website were not tested with target audiences, and the letters were sent out only in English, although 5.5 percent of the adult population in the United States reports they speak poor or no English.
  
  A Spanish-language advertising campaign was launched and translators for over 200 languages are available at a toll-free number, but the form itself remains available only in English.
  
  "By the time we were able to meet with the OCC and the Fed, a lot of things were too late," said Graciela Aponte, senior legislative analyst at the National Council of La Raza, a Hispanic civil rights organization.
  
  She told regulators that the form was too complex and looked "like a scam," but was told "there were absolutely no edits that could be made to it."
  
  [Walter] Walker, [a 20-year] Florida housing counselor, said his clients declined to fill out the form when they realized they were not guaranteed compensation, or were suspicious of it and unwilling to give out personal information.
  
  "Those were the two most common responses I got other than, 'What is this?' and throwing it in the trash can," he said.

For more, see Foreclosure review program befuddles borrowers.