Foreclosure Review Settlement: Banks Face First Funding Deadline

Foreclosure Review Settlement: Banks Face First Funding DeadlineMortgage servicers face a March 15 deadline to make initial cash payments into a specical fund from which qualified borrowers will be compensated for wrongful foreclosure actions taken in 2009 and 2010, according to the most recent consent orders between the lenders and bank regulators.
The order dated Feb. 28, 2013 gives the servicers 15 days to make the payments into a “Qualified Settlement Fund,” from which initial cash payments will flow to borrowers.
Up to 4 million homeowners may be eligible to compensation ranging from hundreds of dollars to $125,000, depending on the severity of harm inflicted by the mortgage servicers, from botched paperwork to outright wrongful evictions.
The $9.3 billion settlement replaced the scrapped Independent Foreclosure Review, which amounted to little progress after 18 months at a cost of nearly $2 billion, none of which represented compensation to victims.
The bulk of the money due by March 15 comes from three lenders: Bank of America ($1,127,453,261); Wells Fargo ($765,823,531); and JPMorgan Chase ($753,250,131).
The remainder comes from: Aurora, Citibank, Goldman Sachs, HSBC, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust and U.S. Bank.
By no later than January 7, 2015, the banks must provide full mitigation or other foreclosure prevention actions.
The overall settlement amount includes $3.6 billion in cash payments and $5.7 billion in other assistance to borrowers such as loan modifications and forgiveness of deficiency judgments.
What remains unclear is the distribution plan yet to be finalized by the bank regulators: the Office of the Comptroller of the Currency and the Federal Reserve.
In the initial news release on Feb. 28, the OCC said: “Borrowers are expected to be contacted by the Paying Agent—Rust Consulting, Inc.— by the end of March 2013 with payment details. The Paying Agent will send payments and correspondence.”
Last month’s consent order emphasizes that loss mitigation actions by the lenders should reflect the following guiding principles:

(a) preference should be given to activities designed to keep the borrower in the home;
(b) foreclosure prevention actions s hould emphasize affordable, sustainable,
and meaningful home preservation actions for qualified borrowers;
(c) foreclosure prevention actions should otherwise provide significant and meaningful relief or assistance to qualified borrowers; and
(d) foreclosure prevention actions should not disfavor a specific geography within or among states, nor disfavor low
and/or moderate income borrowers, and not discriminate against any protected class of borrowers.

Borrowers can call the Paying Agent at 1-888-952-9105 to update their contact information or to verify that they are covered by the amendments.
Regulators say borrowers seeking assistance should work with their servicer or a counselor approved by the U.S. Department of Housing and Urban Development (HUD). Borrowers can reach HUD-approved counselors by calling 888-995-HOPE (4673).
The settlement’s official site is here:

6 thoughts on “Foreclosure Review Settlement: Banks Face First Funding Deadline

  • March 11, 2013 at 11:21 am

    Some interested parties that filed timely request for reviews from the Indepent Foreclosure Review (“IFR”) have since received notification (in less than 4 weeks) from the IFR that their request for review will not be honored. The reason for this, IFR stated is that “The bank claims that the property securing the loan is not the primary residence”. Rust consulting is taking the bank for its word, again, and we see where that has gotten our economy. Rust or someone at that point should and must request proof when the homeowner in the review has provided a copy of their homesteaded property. Is this how the banks will weed out potential claims so less will be paid? We need assistance and someone to listen.

  • March 11, 2013 at 8:10 pm

    IFR, in fact was the right action to fix the responsibility that ultimately was leading to initiate some criminal actions due to criminal offences, To save the skin of BANK The OCC and the Federal Reserve made the amended agreement to IFR only to shield the BANKS, and thereby it is an act of Conspiracy on the part of all parties to IFR and it is a matter of entire cover up that it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the Independent Foreclosure Review process.What is the matter of prime or not.The property is property and loss is loss, and thereby it is discriminatory application of law.

  • March 12, 2013 at 2:30 pm

    I receive a loan monifacation from bank of america last year after trying for almost 3years . The only thing is my payment was $479/ month now it is $778/month, I ended up paying all the back intrest on the loan. Which came to over $27,000

  • March 13, 2013 at 10:52 am

    The number is bogus, when you call the telephone number there is no way to update your information or get payment informaiton 1-888-952-9105.

  • March 14, 2013 at 4:41 pm

    I had a Rural Developement Government Loan held by Chase. Yes I said a GOVERNMENT loan through the USDA. For over 2 years I worked with the HOPE program as well as HAMP escalations in seeking aid in the fraudulent loan servicing of Chase & they had done absolutely nothing to help me resolve the issues or seek legal justice or aid in Amy way shape or form! The government had been aware that Chase had been in fact victimizing us & had every intention of wrongfully foreclosing upon my family AND SIMPLY DIDN’T CARE. long story short, the deed to land we owned had been taken, our $25000.00 down payment-GONE, loss of all equity, and me & my disabled children were served with unlawful tenancy & walked away empty handed. The home that had appraised through the USDA less than 5 years before had been sold at trustee sale by Chase for a measly $62000.00, leaving my family to yet owe the difference. How could the government issue a loan to turn around and want and/or have nothing to do with it when trouble arises causing a financial and hardship to innocent families and all the taxpayers whom will be repaying for these errors in the long run.

  • March 25, 2013 at 11:41 am

    News Flash- Bank of America will now be shutting down it’s mortgage foreclosure branches to cover the $1.1 billion it now owes. Expect thousands to be lose their jobs. NOBABMA!

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