Foreclosure Settlement Payments Range from $300 up to $125,000

Homeowner beneficiaries of the recent settlement agreement made by the Comptroller of the Currency (OCC) and the Federal Reserve Board with 13 mortgage servicers can expect to begin receiving payments next week.  The agreement that ended the independent foreclosure reviews mandated earlier by the Fed and OCC call for a total of $3.5 billion in cash payments to 4.2 million borrowers whose homes were in any stage of foreclosure in 2009 or 2010 and serviced by one of the 13 banks or their subsidiaries.  

Initial payments will go out to customers of eleven of the servicers, Aurora, Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. Payments will range from $300 to $125,000 and will be sent in several waves beginning with 1.4 million checks on April 12.  The final wave is expected in mid-July 2013.  More than 90 percent of the total payments to borrowers at those 11 servicers are expected to have been sent by the end of April.  Those borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley will receive information about their payments in the near future.  

In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent-Rust Consulting, Inc.  Some borrowers may receive letters from Rust requesting additional information needed to process their payments.  Previously, Rust sent postcards to the 4.2 million borrowers notifying them of their eligibility to receive payment under the agreement.

Borrowers can call Rust at 1-888-952-9105 to update their contact information or to verify that they are covered by the agreement.  Borrowers are warned to beware of scams and anyone asking them to call a different number or to pay a fee to receive payment under the agreement.

Accepting a payment will not prevent borrowers from taking any action they may wish to pursue related to their foreclosure.  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.

Payment amounts were determined by a formula which took into account the stage of their foreclosure process and the type of possible servicer error.   Regulators have published the payment amounts and number of people in each category on their Web sites at here and here.

While the agreement ended the Independent Foreclosure Review for the 13 companies identified above, the review continues for OneWest, Everbank, and GMAC Mortgage.