Eligible homeowners in the $9.3 billion settlement, also known as the “Independent Foreclosure Review,” are expected to begin receiving checks April 12.
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»» 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.”