Payments to Eligible Borrowers Begin April 12

Payments to 4.2 million borrowers are scheduled to begin on April 12 following an agreement reached by the Office of the Comptroller of the Currency and the Federal Reserve Board with 13 mortgage servicers.

The agreement, which was reached earlier this year, provides $3.6 billion in cash payments to borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010 and whose mortgages were serviced by one of the following companies, their affiliates, or subsidiaries: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

The payments will range from $300 to $125,000.  Additional details about these payments can be found in the IFR Payment Agreement Details.  Checks will be sent in several waves beginning with 1.4 million checks on April 12.  The final wave is expected in mid-July 2013.  More than 90 percent of the total payments to borrowers at those 11 servicers are expected to have been sent by the end of April.  Information about payments to borrowers whose mortgages were serviced by Morgan Stanley and Goldman Sachs will be published by the Federal Reserve Board soon.

In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent—Rust Consulting, Inc.  Some borrowers may receive letters from Rust requesting additional information needed to process their payments.  Previously, Rust sent postcards to the 4.2 million borrowers notifying them of their eligibility to receive payment under the agreement.

Rust is sending all payments and correspondence regarding the foreclosure agreement at the direction of the OCC and the Federal Reserve.

Borrowers can call Rust at 1-888-952-9105 to update their contact information or to verify that they are covered by the agreement.  Information provided to Rust will only be used for purposes related to the agreement.  Borrowers should beware of scams and anyone asking them to call a different number or to pay a fee to receive payment under the agreement.

Accepting a payment will not prevent borrowers from taking any action they may wish to pursue related to their foreclosure.

Watch out for scams.  Beware of anyone who asks you to call a different phone number than the number above or to pay a fee to receive a payment under the agreement. See frequently asked questions about the agreement.

Continuing Reviews for Customers of EverBank, GMAC Mortgage, and OneWest

For borrowers with mortgage loans with the following servicers: EverBank/EverHome Mortgage Company, Financial Freedom (OneWest), GMAC Mortgage, and IndyMac Mortgage Services (OneWest), the Independent Foreclosure Review process continues. More about the continuing reviews.

OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

Financial Remediation Framework for the Continuing Reviews

For servicers whose Independent Foreclosure Review continues, the consultants will use the framework to recommend remediation for financial injury identified during the Independent Foreclosure Review. The servicers will prepare remediation plans based on the consultants’ recommendations. The federal banking regulators must approve each servicer’s remediation plan. The framework helps ensure that similarly situated borrowers receive similar treatment.

Borrowers’ Quick Reference Guide to the Financial Remediation Framework

On June 21, 2012, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System released a financial remediation framework that provides examples of errors in foreclosures covered by the regulators’ consent orders that require compensation or other remediation as directed in the regulators’ April 2011 orders.  The consultants will use the framework to recommend remediation for financial injury identified during the Independent Foreclosure Review.  The servicers will prepare remediation plans based on the consultants’ recommendations.  The federal banking regulators must approve each servicer’s remediation plan.  The framework helps ensure that similarly situated borrowers receive similar treatment.

Remediation may include suspending a pending foreclosure or rescinding a completed foreclosure, providing lump-sum payments, reimbursing improper fees plus interest, providing a loan modification, and correcting credit reports and other errors in the borrowers’ records.

Lump sum payments can range from $500 to $125,000 plus equity in the most egregious cases.  The remediation amounts contained in the financial remediation framework are intended to reflect financial harm caused by errors in the foreclosure and loss mitigation process.

Examples of actions that may require financial remediation or compensation include:

• Foreclosing on a borrower in violation of the Servicemembers Civil Relief Act;
• Foreclosing on a borrower who was not in default on the mortgage;
• Failing to convert a qualified borrower to a permanent modification after successful completion of a written modified payment plan that was supposed to lead to permanent modification;
• Foreclosing on a borrower prior to expiration of a written modified payment plan that leads to permanent modification, while borrower was performing all requirements of the written plan;
• Denying a borrower’s loan modification application that should have been approved;
• Failing to offer loan modification options as required by an applicable program;
• Giving a borrower a loan modification with a higher interest rate than should have been charged under the relevant loan modification program;
• Foreclosing on a borrower in violation of federal bankruptcy laws;
• Not providing a borrower with proper notification during the foreclosure process; and
• Committing errors that did not result in foreclosure, but resulted in other financial injury.

The examples cover many categories, but do not address all possible scenarios.  Not all errors result in financial injury.