Payments of as much as $125,000 are being mailed out to foreclosed borrowers covered under an agreement reached earlier this year.
The Office of the Comptroller of the Currency announced in January that it reached an $8.5 billion deal with 10 servicers. The agreements resolved foreclosure review requirements from April 2011 consent orders that emerged from faulty foreclosure practices.
The 10 firms were Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
By the end of January, agreements with another three financial services firms — Goldman Sachs, HSBC and Morgan Stanley — were additionally announced by the OCC and the Federal Reserve.
On Tuesday, a joint statement from the OCC and the Fed indicated that payments to 4.2 million borrowers would begin going out on April 12, and most are expected to have been sent by the end of this month.
Payments will range from $300 to $125,000 and total $3.6 billion. The payment amounts were determined based on the stage the borrowers’ foreclosures reached and the degree of servicer errors.
The checks will be sent from Rust Consulting Inc. — the paying agent.
Impacted borrowers’ homes had loans with one of the servicers that were in foreclosure between 2009 and 2010.
Payments from Goldman Sachs and Morgan Stanley will be sent separately.
Even though borrowers accept the payments, they can still pursue action related to their foreclosure on their own.
“Servicers are not permitted to ask borrowers to sign a waiver of any legal claims they may have against their servicer in connection with accepting payment,” the announcement stated.
