Along with the Federal Reserve is the US Comptroller Currency in revealing the settlement plan from the nation’s biggest banks including Citigroup, Wells Fargo, JPMorgan Chase and the Bank of America. The said banks, along with nine others, reached an agreement with both government agencies to pay borrowers with a total of $9.3 billion in cash and a reduction in balances for existing home loans and mortgages.
Banks’ payment schedules
Borrowers who qualified for the foreclosure settlements and who have obtained mortgages from 11 banks will be receiving payments before April ends. The federal agencies say that 90 percent of the borrowers are included in this payment schedule.
The 4.2 million borrowers, who lost their homes or at the brink of foreclosure, will be receiving cash in as little as $300 to as much as $125,000. Major banks have allotted $3.6 billion to be distributed to qualified borrowers. The last payment releases will be completed in the middle of July.
Further, settlements worth $125,000 will most likely be given to the 1,082 military personnel who had their homes foreclosed. Foreclosing homes of military personnel who are in active service is illegal.
Additionally, there were 53 borrowers whose homes were foreclosed although their mortgages were not in default.
Borrowers denied of loans modification also qualify
The Federal Reserve and the Comptroller Currency also said that homeowners who were found to have been unreasonably denied of loans modification qualify as well. However, they may only receive small amounts as settlements. The biggest groups to receive the biggest payments are those who had their homes unfairly seized. The amounts reported are only applicable to loans and mortgages that come from the 11 banks who confirmed their participation. Morgan Stanley and Morgan Sachs are yet to announce their guidelines.
Consumer banks also involved
Other banks to pay for the foreclosure settlements include Aurora, Suntrust, US Bank, Sovereign, PNC Financial Services, MetLife Bank and HSBC. The coverage of their settlement includes borrowers who were served foreclosure papers from 2009 to 2010.
In 2011, The Federal Reserve and the Comptroller Currency initiated an independent review of loans that ended up being questioned by banks and consumer advocates. Critics say that the reviews were costly, time-consuming and failed to reach affected consumers.