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Borrowers may get 2 checks in deals

By Polyana da Costa · Bankrate.com
Friday, April 19, 2013
Posted: 4 pm ET

Many of the borrowers who have received a check from Rust Consulting under the so-called foreclosure review settlement are wondering why their payments were less than the minimum $840 they were told they would get.

"Why did the paperwork promise a minimum of $800 per homeowner and now its $300?" one reader asks.

"On a letter I received it said that I would receive no less than $840," another reader writes.

Let's clarify the confusion.

A pair of settlements

There are two mortgage settlements in which borrowers will receive checks this year. The one that will pay borrowers a minimum of $840 is the National Mortgage Settlement, which resulted from negotiations between 49 state attorneys general, the federal government and five of the nation's largest banks. These payments have not been mailed out yet. (Oklahoma didn't participate in the settlement.)

The checks that borrowers are receiving now resulted from a settlement led by the OCC with 13 banks to halt the review of foreclosure files for borrowers who had homes in foreclosure in 2009 and 2010.

I'd like a double dip, please

  • Can you get a payment under both settlements?

If you meet the criteria for both, you may get two checks. Receiving a check for the foreclosure review settlement will not stop borrowers from receiving payment under the national mortgage settlement, says Geoff Greenwood, communications director for the Iowa attorney general.

Who's eligible for what?

  • National Mortgage Settlement payments totaling $1.5 billion:

This is for borrowers who lost their homes to foreclosure between 2008 and 2011 and had loans that were not owned by Fannie and Freddie and whose were serviced by one of the five lenders: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.

Claim forms were mailed out to eligible borrowers last year, around September and October. Only borrowers who submitted claim forms will receive payments. The deadline to submit the forms was in January. This is different than having submitted a request to the OCC for a foreclosure review.

Based on the number of eligible borrowers and the $1.5 billion available for cash payments, borrowers who submitted a claim will receive a minimum of $840, but likely more because many borrowers probably didn't respond.

Regulators are in the final stages of processing the claims and the checks are expected to be mailed out by early summer, Greenwood said.

To make matters more confusing, the paying agent in both settlements is Rust Consulting. If you get mail from Rust Consulting, don't throw it away.

  • Foreclosure 'review' settlement payments totaling $3.6 billion:

This is for borrowers who were in foreclosure in 2009 and 2010 and whose loans were serviced by one of the 13 banks in the agreement. More than 4 million borrowers will receive checks ranging from $300 to $125,000. Most checks are less than $1,000. The majority of these checks will be sent by the end of April.

Here's what the payment envelope from Rust Consulting looks like.

Follow me on Twitter @Polyanad.

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106 Comments
robert wolf
May 16, 2013 at 6:01 pm

when are the checks comin my loan was with gmac the independent foreclosure review stated that the review for gmac would not come till july now I wonder will the checks be any good?

Donna
May 14, 2013 at 4:34 pm

What a confusing mess my lender is Litton Loan which is owned by Goldman Sachs who was bailed out in the Wall St mess. I get a check for $300 when my house payment increased from $645 per month to almost $2,000. What the heck I was FORCED out of my home for that reason alone because I am on a fixed income! So much for the fine loan modification I had for about 6 month's! I made every payment on time! I am financially RUINED because of this fiasco! So how did they decide who get's what and why are we not notified of the calculations used to determine the amount we are suppose to get. So I guess I am just suppose to wait to see if I might be lucky enough to get a check. In addition I don't recall getting a Claim Form and was it spelled out what filling out the form would do for you? I am tired of being stomped on by the governement and sick of the rich keep getting richer while I can barely afford to buy medication every month! My rent right now is more than my house payment was under the loan modification so is there a bailout for that?

Ray Westphal
May 12, 2013 at 11:31 am

More Money on the way. For some in the 3rd and 4th wave there will be additional checks sent as soon as May 17th. There was a clerical error made.You can google it and read more about it.

brenda
May 11, 2013 at 5:48 pm

same situation here as Martha. I was told what my house payment was going to be,but a week before closing the deal, they (country wide) tells me they made a mistake and my payment went up 200.00 more, so i was over a 1000.00 house payment, my first house, single mother of 2. They also had me borrow 3000.00 from my mother to put in my savings account just to make it look good to approve my loan, among other things like useing child support and overtime as a set income.So of course i was set up to fail basically,before i even got the house. So after my overtime came to a halt, i was told i had to pay 200.00's to get a load mod.and after paying the NON REFUNDABLE 200, they told me they won't help unless i make 3 payment in a row of 1500.00. WTF??? i cant pay 1000, so with them threatening me to put locks on my house after i made a "good faith" payment ( thats what they said i should do if i can't pay the full) I felt like i had no choice but to get our things and move before they took everything we owned. Because of trying to keep my house i had to let the bank repo my truck (wells fargo had that loan,go figure) and just recently filed bankruptcy. this settlement is just another way for the banks to make more money off the same ppl they already cheated out of their homes! how many times are they going to rob us? Here i am for years thinking i was at fault until i heard all these other similar stories. Now they give me a check in the amount of 500.00,not even HALF of what my monthly house payments were and not even an apology. So the banks are walking away from this with basically another failed bail out program. No doubt they are hoping we shut up and don't complain so they can pocket the millions left over. They win again and those who were able to stay in their homes will win. Those that were forced to make a decision to stay and lose everything or leave your home with what you had left lose again!!! It's a big slap in the face to those who lost everything and received a 3 to 500.00 check. ill sign a petition! i'm so tired of helping the rich get richer at the cost of my losses!!!

Ray Westphal
May 09, 2013 at 8:15 pm

Its a petition called Re-evaluate the Independent Foreclosure Review and review OCC and Federal Reserve's Role.
If I knew how to cut and paste I would have got you the link.
It is the Presidents White House website under blog and petitions. Let me know if you can't find it and I will try to do better for you. Good Luck!

B-No
May 09, 2013 at 10:46 am

Ray,

Where can I find the petition?

Bri

Ray Westphal
May 09, 2013 at 10:08 am

Martha there is more talk about this and a petition to sign to get the government to do something as many are very upset in the amount they have been delt. So I urge you to go sign it. There are governments that are also upset that they are getting off the hook once again.

Martha
May 09, 2013 at 8:20 am

The National Mortgage Settlement states the check will be sent Mid Year 2013. Last week their website stated Mid May to the end of May and today it states Mid Year...

They did state there were certain "guidelines" they went by for how much is being paid from the Independent Settlement. It depended what status of your modification/foreclosure was in at a certain time point. I think it is garbage. The settlement was (don't quote me exactly) 3.2 billion dollars for 4.6 million. I received $500.00. Bank of America lied to me during the whole process. I was never late on a payment and they told me I could pay a lower payment while my modification came through. In the meantime, they started to foreclose on me based on the fact that I was paying a lower payment that the bank told me to pay. Of course, this was never in writing...although I have my notes on the conversations. Then to protect me from the foreclosure I had to go through Bankruptcy. Do I think $500.00 makes up for all this...No Way! I do appreciate that at least I got something.

Ray Westphal
May 08, 2013 at 8:22 pm

My home is still in limbo but we still own it.

Bknig
May 08, 2013 at 7:46 pm

I wonder how did they decide who got what amount of money. If you in this refund settlement that mean you lost a house too. So why did some people get 300 and some get more. Don't understand that. So is there another refund for people who put in for it and when do that one come out? Just need answersB