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 practices.

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.