Over four million homeowners may be
eligible for compensation for mortgage servicer-related problems under
agreements announced today. The
agreements with 13 servicers for deficient practices in mortgage loan servicing
and foreclosure processing were originally reached with the Office of
Comptroller of the Currency (OCC) and the Federal Reserve Board in
January. Amendments to enforcement actions
against the servicers that memorialized the agreements were released Thursday
and will release the servicers from completing which will replace the
Independent Foreclosure Reviews.
The amendments require the servicers to
provide $9.3 billion in payments and other assistance to an estimated 4.2
million borrower customers of the companies who had homes in any stage of the
foreclosure process in 2009 or 2010. These
borrowers are expected to receive compensation ranging from hundreds of dollars
up to $125,000. Mortgage assistance is expected to comprise $5.7 billion
of the total and cash payments the remaining $3.6 billion.
In providing the assistance servicers are expected to undertake
well-structured loss mitigation efforts focused on foreclosure prevention, with
preference given to activities designed to keep borrowers in their homes.
OCC and Federal Reserve examiners continue to monitor the servicers'
implementation of corrective actions required by the original enforcement
actions to address unsafe and unsound mortgage servicing and foreclosure
Borrowers are not required to take any
additional steps to receive the payments.
They will be contacted by the Paying Agent, Rust Consulting, Inc. with
payment details, probably by the end of March. In addition, borrowers
will not be required to execute a waiver of any legal claims they may have
against their servicer as a condition for receiving payment.
The amendments involve Aurora, Bank of America, Citibank, Goldman Sachs,
HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust,
U.S. Bank, and Wells Fargo.
Three other servicers, GMAC Mortgage,
Everbank, and OneWest did not enter agreements and their part in the Independent
Foreclosure Review process continues. Their reviews, involving approximately
457,000 mortgages, are expected to be completed in the coming year.