Borrowers are eligible for the money if they were in any stage of the foreclosure process in 2009 or 2010 and had their mortgages serviced by Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
The payout amounts are based on the level of wrongdoing throughout the foreclosure process and whether the home was ultimately repossessed by the bank. In total, 1,135 borrowers will receive the maximum amount of $125,000. Homeowners who applied for a loan modification who never received an answer are expected to receive between $400 and $800; homeowners who lost their home even though they were not in default will receive $125,000. In most cases, borrowers who applied for the Independent Foreclosure Review will receive more money than those who did not.
Most eligible borrowers will receive a letter with an enclosed check sent by Rust Consulting, Inc. Rust Consulting, Inc. previously sent postcards to the 4.2 million borrowers notifying them of their eligibility to receive payment under the agreement.
The checks will be sent in several waves, beginning with 1.4 million on Friday, April 12, 2013. The final wave is expected in mid-July 2013, although 90% of all payments are expected to be sent by the end of April. All 4.2 million homeowners in foreclosure during 2009 or 2010 will receive money even if they didn’t apply for it. In Minnesota, approximately 29,000 foreclosure sales were completed in 2009-2010.
For more information on the payments that are to replace the failed Independent Foreclosure Review, see the press release from the OCC.
Michael Wang is a Minnesota civil litigation attorney and senior associate at Drewes Law, helping many clients navigate the Minnesota foreclosure process and other civil matters. He can be reached by email at email@example.com.