Homeowners Will Be Contacted Within The Next Three Months After Monday’s $8.5 Billion Foreclosure-Abuse Settlement
A few days ago, we posted about the $8.5 billion settlement between 10 of the major banks and federal regulators. The money comes as a replacement for the recently scrapped Independent Foreclosure Review.
According to new info, nearly 4 million homeowners will be contacted within the next three months to receive payment. Homeowners who fell into the foreclosure process during 2009 and 2010 may receive payment even if they cannot prove any wrong doing. Eligible homeowners will receive payment even if they did not apply for a foreclosure review.
The settlement agreement states that banks will pay as much as $3.3 billion directly to 3.8 million affected borrowers. The deal also designates $5.2 billion for loan modifications and other assistance to borrowers.
The amounts paid to homeowners will vary between a few hundred dollars and $125,000.The amount of compensation will be determined by the wrong doing by the bank such as being denied a loan modification or being wrongly foreclosed upon.
Who is overseeing this distribution?
The distributions will be overseen by a yet-to-be-determined third-party firm that will be appointed jointly by 10 of the largest banks – including JPMorgan Chase, Bank of America, and Wells Fargo. – and overseen by regulators. Unfortunately, the recent Independent Foreclosure Review had a similar “third party” set-up and had many watchdog groups criticizing the review and process as not being truly independent.
Hopefully this “new and improved” program will actually be transparent and benefit homeowners.