Mortgages Blog

Finance Blogs » Mortgages » Foreclosure ‘review’ checks on the way

Foreclosure ‘review’ checks on the way

By Polyana da Costa · Bankrate.com
Tuesday, April 9, 2013
Posted: 5 pm ET

If your home was in the process of foreclosure in 2009 and 2010, you may be getting a check in the mail next week.

More than 4 million borrowers will receive payments ranging from $300 to $125,000, as a result of a settlement over improper foreclosure practices reached between regulators and mortgage servicers. The checks are scheduled to be mailed out starting Friday.

To benefit from this agreement, your loan must have been serviced by one the following companies, their affiliates or subsidiaries:

  • Aurora.
  • Bank of America.
  • Citibank.
  • Goldman Sachs.
  • HSBC.
  • JPMorgan Chase.
  • MetLife Bank.
  • Morgan Stanley.
  • PNC.
  • Sovereign.
  • SunTrust.
  • U.S. Bank.
  • Wells Fargo.

Borrowers will receive payments even if they were not victims of errors or misconduct by the servicers when their homes were in foreclosure.

Why does everyone get a piece of the pie?

Originally, regulators required servicers to hire third-party consultants to identify borrowers who suffered financial injury. They also offered borrowers a chance to have their foreclosure files reviewed for potential errors, so that the victims could receive compensation for the wrongdoing.

A year later and after more than $2 billion was paid to consultants reviewing the files, regulators decided that the process was too complicated. They put an end to the foreclosure reviews and reached an agreement with the mortgage servicers to provide $3.6 billion in cash payments to borrowers.

How do you get your share?

If your mortgage was serviced by one of the companies listed in the settlement, and you faced foreclosure in 2009 and 2010, you probably will receive a check sometime between next week and the end of July. About 1.4 million checks are expected to be sent by the end of April. The final wave of checks goes out by mid-July.

Goldman Sachs and Morgan Stanley are part of the agreement, but borrowers whose loans were serviced by them will not get paid yet. Information to these borrowers will be announced in the near future, the Federal Reserve says.

The checks will be sent by Rust Consulting Inc. If you want to confirm that you qualify for a payment or have moved and need to update your contact information, call (888) 952-9105. You will have to listen to a series of automated messages for about three or four minutes, but you'll get to talk to a representative after that.

How much will you get?

The payment amounts will be based on the stage of a borrower's foreclosure and the type of "possible servicer error" that regulators think you may have been a victim of.

How did regulators identify possible errors without reviewing the loan files? An OCC spokesman said that, rather than trying to identify potential errors, regulators used multiple automated systems to identify "objective" loan attributes such as:

  • The stage of foreclosure.
  • Whether a borrowers' loan modification was approved or denied.
  • Whether the borrower had requested a loan review.

The Federal Reserve and the OCC provided data with the payment details that resulted from this automated process. Here is a sample of the loans that qualified for compensation:

Loan mod was denied

According to the data, more than 300,000 borrowers lost their homes to foreclosure after loan modifications were denied. These borrowers will receive $3,000 each. Those who fall under this category and had previously requested a loan review will get $6,000.

Successful trial mod wasn't made permanent

Borrowers who got a loan modification and completed the payments required under the trial period but still lost their homes to foreclosure after the lender failed to convert the modification to permanent, will get $25,000 ($50,000 if they requested a review).

Borrower wasn't even in default

Some borrowers will get the maximum payment of $125,000. They include 53 homeowners whose homes were foreclosed on even though they were not in default.

Foreclosure hasn't been completed

If you've been through the inconvenience of having the lender try to foreclose on your home but the foreclosure is still in process, you (and about 600 other borrowers) will get about $5,000.

What do you think of this agreement?

I'd love to hear from borrowers who think they will be getting a check.

Follow me on Twitter @Polyanad.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
483 Comments
Goodman
April 18, 2013 at 12:59 pm

This blog will not allow you to post whatever you want. It is very selective. Another conspiracy.

Goodman
April 18, 2013 at 12:54 pm

What about the nationalmortgagesettlement? When will that money be going out?

kv
April 18, 2013 at 12:45 pm

I think anyone getting something from BOA will only get max 600.00

Carol
April 18, 2013 at 11:35 am

Hm! Only mailed on Fridays, I wonder if that has anything to do with earning interest on the funds.

Dotty
April 18, 2013 at 11:07 am

I called yesterday. ALL checks are being sent regular mail. I was told checks would be sent through august, now today I see they are going out every friday. Next wave Fri. 4/18/2013.

DJ
April 18, 2013 at 11:00 am

@ kv. B of. A did the same to me!! I have Sps now and they started the same nonsense !! Send in docs , you don't qualify ....here's a new program. send in docs ....we didn't get the docs ...oh we found the docs...sorry its taking so long to make a decision.....we don't have all the docs....and it just goes on!!! I thought this was suppose to end !!!!

kv
April 18, 2013 at 10:25 am

I have been in foreclosure limbo for 3 years and also part of a bankruptcy. They refused to do anything but put it in foreclosure status. They also were trying to use a company not legal to use in the state of Utah. As of about 3 months ago, BOA sold my mortgage to some other company not part of the settlement who are now finishing what BOA refused to. I suspect they did this so because of liability due to this settlement. BOA has soaked me for insurance I didn't owe for 3 times the amount I payed, (which was paid already and sent in proof) and refusing to allow myself or my attorny to talk with anyone, refused to undo the charges. Home is only worth $79,000. but with everything they dreamed up, they have racked up $18,000. worth of fees on top of that in less than 2 years, almost 20% of the value. Does anyone see a problem here?

Angela
April 18, 2013 at 9:26 am

**THIS IS FROM A SENATE HEARING HELD WITH SENATOR MENDEZ AND RUST YESTERDAY**** THIS IS RUST REPLYING TO THE SENATOR

"The first wave of checks were mailed onFriday, April 12th. Yesterday we became aware of check cashing issues that some payeesencountered, and we are addressing those issues and will have solutions in place todayand on a go-forward basis. The majority of the remaining checks will be mailed in threemore waves occurring on April 19th, April 26th, and May 3rd. Rust continues to staff a callcenter to take incoming calls from homeowners with questions about the program. Wealso updated the IFR website to provide new information regarding the settlement."

dianne Baginski
April 18, 2013 at 6:34 am

i have been fighting in court a wrongful foreclosure attempt and i am at an appeals stage in guernsey county Ohio. US Bank NA and the O**** loan servicing and its legal team have been very resistant to creditng payments made over 18 months , Illegal default fees at twice the legal limit 250% insurance with intent to pyramid fees, Also extortion demands to foreclose in order to collect the illegal fees for insurance , illegal default fees , miscomputed RESPA ( I paid over 3200 in taxes in advance) for 2 yrsof taxes ...
Ohio law 1321,56 states that the lender will lose all of the interest paid on the loans, ( a proper exemplary punitive damages) however it does not say they will only lose the interest on that particular loan, hence mt spaouse in looking to file to clain all of the interest an oll of the loans with the illegal servicing by Ocwen and US Bank NA
After they were notified by OCC (consent decree ), the atty gens Office, my certified mail and the MDL on northern IL in US District Court.

Gail
April 18, 2013 at 12:38 am

Rust said checks are mailed every Friday.