Mortgage Servicers New $8.5-Billion Settlement

Mortgage Servicers New $8.5-Billion Settlement

Mortgage Servicers New $8.5-Billion Settlement

New $8.5 Billion Settlement Replaces Independent Foreclosure Review

With the quick dismantling of the Independent Foreclosure Review, the ten nation’s largest mortgage sevicers agreed in its place to a new program that authorities say will distribute aid to homeowners “significantly more quickly.”

Maybe homeowners have heard this scenario before. Scrap one federal bank review program in favor of another. This structure of this “new and improved” settlement has ten of the nation’s largest mortgage servicers have agreed to an $8.5-billion settlement.

Some of the familiar banks names took part in the settlement including Bank of America, Wells Fargo, JPMorgan Chase and Citigroup.

The Office of the Comptroller of the Currency and the Federal Reserve announced specifics of the settlement breakdown which state that the mortgage companies will make $3.3 billion in direct payments to “eligible borrowers” whose foreclosures were handled improperly, and will make $5.2 billion available in other assistance to struggling borrowers, such as loan modifications.

Borrowers Can Receive Up To $125,000

Similar to the Independent Foreclosure Review, borrowers could receive as much as $125,000, depending on the type of problems with their foreclosures. Unfortunately, most borrowers did not qualify for payments of that magnitude. We don’t hold much confidence that homeowners will benefit greatly from this settlement.

Many watchdog groups criticized the Independent Foreclosure Review as not being truly independent. With the banks having some input into the review process, some compared it to the fox guarding the henhouse

This new settlement couldn’t be less effective than the Independent Foreclosure Review, so let’s see how this new program benefits homeowners.

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2 Comments

Filed under Banks, Foreclosure, Mortgages

2 responses to “Mortgage Servicers New $8.5-Billion Settlement

  1. Pingback: Foreclosure Settlement Money Three Months Away | Resource Blog

  2. Pingback: Delayed FHA Conversion to Permanent Modification | Resource Blog

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