Independent Foreclosure Review: Borrowers Wait to Hear Something on Compensation

Independent Foreclosure Review: Borrowers Wait to Hear Something on CompensationEligible homeowners in the $9.3 billion settlement, also known as the “Independent Foreclosure Review,” are expected to begin receiving checks April 12.
Read the latest:
»» Payout Disparity: Many Who Requested Reviews Getting Twice as Much
»» Lawmakers Seek Updates on Foreclosure Payouts, Other Assistance

»» Foreclosure Review Payouts: Most are in $500 to $6,000 Range

The compensation range is from hundreds of dollars to $125,000.
Regulators have published the payment amounts and number of people in each category.
The types of errors that occurred in foreclosures initiated in 2009 and 2010 have placed those eligible in category groups ranging from relatively minor to the very egregious, according to Thomas J. Curry, the Comptroller of the Currency, the primary bank regulator overseeing the settlement.
Curry spoke of the compensation briefly during a speech this week. He offered few details about the payout plan from the settlement reached last month after more than a year of costly and lengthy delays in reviewing thousands of foreclosure cases by more than a dozen mortgage servicers.
The most egregious category with the biggest payout in the old framework belonged to the victim if a “servicer initiated foreclosure or foreclosed on borrower who was not in default on mortgage or in default only directly due to servicer error.”
The compensation for this top category: $15,000 in cash; rescinding the foreclosure when possible; correcting servicer records for any improper amounts, and correcting credit reports.
However, if rescinding the foreclosure was not possible under this category, the compensation would be $125,000 plus equity, fixing deficiencies and correcting credit reports.
Here’s what Curry, the Comptroller of the Currency, had to say about compensation in a speech this week:

“I know there has been some concern about how we will determine the size and distribution of payments without the full review. Regulators spent a significant amount of time determining categories of potential harm. The types of errors that could have occurred fall into 11 basic groups from relatively minor to the very egregious.
“Eligible borrowers will be slotted into each group based on objective loan attributes and borrower characteristics, and then compensated based on that category, a much simpler process than the original IFR (independent foreclosure review).
“The OCC and the Federal Reserve will then determine the amount of payment for each category ranging from hundreds of dollars to $125,000.”

9 thoughts on “Independent Foreclosure Review: Borrowers Wait to Hear Something on Compensation

  • February 17, 2013 at 9:26 am

    As a former contractor working the IFR for BOA, I am puzzled a bit how Curry’s statement…”“Eligible borrowers will be slotted into each group based on objective loan attributes and borrower characteristics….” will actually pay out. What we uncovered were many instances where servicers did not follow HAMP guidelines, failed to stop fcl action during loss mitigation processes, commited automatic stay violations, and set up fraudulent breach and default notifications against the provisions of the original Mortgage. I can’t read anything from Curry’s statement that will address these issues….and these issues are what SHOULD have been exposed to the public.

  • February 20, 2013 at 10:23 pm

    What category will fit for a homeowner who chose a short sale in lieu of foreclosure. My house was in foreclosure when Bank Of America told me to stop making payments and apply for a home mortgage modification due to the loss of income. They granted the modification and took all missed payments, put them on the back end of the mortgage, and stopped the financed percentage rate from increasing for five years. I was not able to comply with that as I had lost my Job. I asked them if I could short sale my home instead of foreclosing on the property. I was able to find a buyer and they accepted the offer of $175,000 and closed on November 2010. I bought the house for $377,000 in Oct. 2005.

  • February 24, 2013 at 8:49 pm

    @Cox, your situation will be dealt with from category 13 of the framework.

  • February 25, 2013 at 1:34 pm

    I am curious…we applied for our first mod in the fall of 2009, when my husband’s income changed, he went self employed. We were set up on the “trial modification” from about Nov 2009 thru Feb 2010. During this time, we made all trial payments on time, as required, Also during this time, my husband unexpected had quad-bypass, keep in mind he was self employed, so no short term disability pay, my income was the only source we had. This change in things was immediately communicated with our lender/servicer (ASC aka Wells Fargo). At the end of the trial period, we were told to continue making the reduced payments, however we got a letter in March 2010 telling us we were denied for the modification, and the reason was we didnt make enough money. Um, ok…that was why we were trying to mod the loan. We reapply for another program, and resend everything again, including medical bills, EOBs, etc for documentation of the major surgery. We then get a letter in April (real quick turn time second time, huh?) advising us “we were not at risk for default on our loan, therefore the loan modification was DENIED!”…and less than a month later we were served with papers taped to the front door for foreclosure. This was also the same day we came home from the hospital from a surgical complication from the Quad-bypass. Nice homecoming. Needless at that point, we had no more fight left in us, and we let them have the house back. I just would like to get an idea of what kind of compensation we might be looking at. We diligently tried to work with them in providing information over and over and over and over, as they wanted, calling to follow up, making the payments, etc, to only get a slap in the face. Did we want to lose our home, no. But at least we were not alone in getting totally screwed by our servicer.
    Any information would be greatly appreciated. I just have sneaking feeling that the majority of wronged-homeowners will be in the payment “bucket” of $250….gee, thanks, that would buy groceries for about 2 weeks, if Im lucky!

  • March 4, 2013 at 1:42 pm

    My wife and I divorced and she left me with the mortgage payments. I tried to get Bank of America to modify the loan but was told that since I wasn’t behind on the mortgage they couldn’t modify. They said to stop paying for 4 months and then to reapply. I did just that and when I tried to get a modification they denied me again. I then put the house up for sale, I accepted an offer for about $10000 less than what was owed and applied for the short sale. When closing day came, BOA hadn’t processed the sale and it fell through. The buyer then threatened to sue me if I didn’t pay them $1500 for the costs they put in to the offer. I got a letter from BOA 4 months later saying that they were reviewing the short sale. I gave up and moved out. Does anyone know what, if any my situation would fall under?

  • March 13, 2013 at 4:05 pm

    It falls under the Independent foreclosure review hopefully you filed a claim.

  • March 20, 2013 at 2:34 pm

    How much is in the category 13 for these types of situations?

  • March 26, 2013 at 8:25 am

    I requested a modification, was given a run a round for six months repeatedly asked for the same documents over and over while being told to keep the payment up to date or I wouldn’t qualify. I borrowed money to keep the payment current and then received a letter stating that I did not qualify because my payment was current. Does anyone know where I fall in the framework of this compensation?

  • April 3, 2013 at 1:43 pm

    It really is a joke this whole mess. The government and consultants make out on the poor homeowners dime. I really would be interested in a Class Action Lawsuit. Please post if anyone knows of one go participate in. I am really tired of the big banks and government bullying everyone around. If we all band together we could get redemption against the banks and the government that is suppose to be helping!!!

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