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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
zelia
November 25, 2013 at 9:28 pm

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marko
November 11, 2013 at 6:47 pm

Are these payments taxable.

roxanne
November 10, 2013 at 4:59 am

well good luck on the reissue check! i have been told same information its being reviewed! since may! same deal sent all requested inf. back to them along with initial check sent to me still waiting.its now november!! contact attorney generals office and they will check into it.

Deborah
November 08, 2013 at 2:01 am

I asked Rust Consulting to re-issue check back in july....im still waiting after Rust confirmed that my paperwork was recieved prior to them sending the initial check???? I have filed every complaint i could still no response Rust claim they are still reviewing my information which contains my fathers death cert., executor of estate information, and reciepts totalling 9000.00 from my bank acct. What is there to review????

letucia
November 07, 2013 at 10:41 am

I am also waiting for the check i maild out my release form and called them, they told me my release form had been recieved on sep 30 and it would take 6-8 weeks well tomorrow will be 8 weeeks and still all they will say us call back to check we might have mailing date....need to pay my bills.

Donna
November 06, 2013 at 12:57 pm

Can anyone tell me if these checks we got are taxable at the end of the year?

Tremaine Baker
November 02, 2013 at 4:31 pm

I've learned that there was a second mortgage settlement in October. I had a second mortgage on the same house that was foreclosed. I'm I in title to a second pay out?

Mr Smith
October 29, 2013 at 11:12 am

Help someone...I still haven't received my check. My release form with amount I am getting paid was sent to Rust Consulting over two months ago. I spoke to a rep at Rust Consulting/CWFLsettlement last week and he told me that they received my release and said it would take up to 8 weeks before a check is sent . It has now been over 8 weeks!! Just curious if anyone else out there is going through the same thing or if you can answer if it will be longer than the 8 weeks? Please help me someone with an answer. Thanks!!!

Bob Wilson
October 02, 2013 at 12:47 pm

I lost two homes because of the mortgage fraud that was basis for the NM Settlement, but even thou I filed two separate claims and Rust processed both of my claims, they refused to pay on one of my claims, not because it was not entitled,but becuase they said they only have to pay one per "borrower".
Is that true, they refuse to send me proof of such a restriction.
Thanks you,
Bob

Charity
September 30, 2013 at 1:31 pm

How do I find out if I am due a refund? My home was forclosed in 2010?