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Press release - Independent foreclosure review to provide $3.3 billion in payments, $5.2 billion in mortgage assistance

Joint Release
Board of Governors of the Federal Reserve System
Office of the Comptroller of the Currency
NR 2013-3

FOR IMMEDIATE RELEASE

January 7, 2013
 
Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance
 
WASHINGTON — Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments.  The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision.  The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner.Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.  For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.  As a result of this agreement, the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework allowing eligible borrowers to receive compensation significantly more quickly.  The OCC and the Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process.  Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation.    A payment agent will be appointed to administer payments to borrowers on behalf of the servicers.  Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details.  Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment.  In addition, the servicers’ internal complaint process will remain available to borrowers.  The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.  OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.
 

5 Comments to Press release - Independent foreclosure review to provide $3.3 billion in payments, $5.2 billion in mortgage assistance:

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Patsy Dillard on Thursday, March 14, 2013 5:35 PM
This whole thing is a sick joke. I knew when I saw the framework of what borrowers like me (who were actually illegally foreclosed on) what once again be screwed by the big banks and the federal government. Instead of compensating those who were really harmed by these backs, now the governemnt decides to make a settlement for me and others whose foreclosure may have been warranted and lump us all in the same category. Sure I've lost everything and that $250 payment is really going to get me back on my feet, lol. I think all who have a valid grivance should get together and file a class action suit against the banks, rust consulting and the government.
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Borrowers do not need to take further action to be eligible for compensation.
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