Queens residents who were in foreclosure in 2009 or 2010 with any of the 13 mortgage servicers that inked an agreement with federal regulators last week are expected to be contacted by the end of March about receiving payments, which could range anywhere from a few hundred dollars to $125,000.
In April 2011, federal regulators required the mortgage servicers to hire independent firms to conduct reviews of 2009 and 2010 foreclosures.
The idea was to investigate, case by case, the possibility homeowners were damaged by questionable foreclosure practices such as robo-signing, or approving foreclosures without the proper paperwork in order.
In January, however, the U.S. comptroller of the currency announced his office had ended the review before it was completed and reached a $9.3 billion agreement with 13 servicers — Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo — before the complete scope of their practices was revealed.
All told, 4.2 million borrowers will receive a portion of $3.6 billion in direct payments and $5.7 billion in other assistance, such as loan modifications and forgiveness, as a result of the settlement formally agreed to last week.
The comptroller’s office announced that Rust Consulting Inc., the settlement’s paying agent, is expected to contact borrowers by the end of March with payment details. Borrowers can verify they are covered by the agreement and update their contact information with Rust by calling 1-888-952-9105.
Since the review was cut short before it could determine how much damage was done to each borrower, payments will be made based on the kind of mortgage a homeowner had.
“I know there has been some concern about how we will determine the size and distribution of payments without the full review,” Comptroller Thomas Curry said. “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 [review],” he added.
Mamta Gurung, a program director at the Jackson Heights-based housing counseling agency Chhaya CDC, said she was concerned borrowers, especially those in minority communities, may be taken advantage of by scam artists trying to make a buck off the settlement’s news.
“How [is the OCC] going to reach out to immigrant communities and minority communities? I have people come in who say, ‘Oh, I heard I’m going to get some money.’ But there’s a lot of misinformation about the little bit that has been released,” she said.
Reach reporter Rich Bockmann by e-mail at firstname.lastname@example.org or by phone at 718-260-4574.
©2013 Community News Group
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