The U.S. government currently mandates a case-by-case review of housing crisis foreclosures. Because of the large amounts of homes in foreclosure during the recession, it could take months or even years of waiting for courts to process the paperwork. On Monday, January 7, however, a group of 10 mortgage servicers agreed to pay a total of $8.5 billion to end the case-by-case review system. Reuters reports that it was an “acknowledgement the program had proven too cumbersome and expensive.”
The US Office of the Comptroller of the Currency (OCC) stated that roughly 3.8 million borrowers whose homes were in foreclosure within the time frame of the review will receive cash compensation ranging from hundreds of dollars up to $125,000, depending on the type of errors they experienced.
Among those paying out are Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Wells Fargo & Co, MetLife Bank, Aurora, PNC, Sovereign, SunTrust, and U.S. Bank. They will pay out $3.3 billion directly to borrowers and $5.2 billion in loan modifications and forgiveness.
Bank of America said it supports the new approach “because it expands the number of borrowers who will receive payment, speeds the delivery of those payments, and will provide support for homeowners still struggling to make payments.” The other mortgage servicers said they were also pleased to reach a settlement.
Mortgage and foreclosure news can be confusing to navigate by yourself. Consider reaching out to Wisconsin Mortgage Corporation for any additional information on this settlement or any other mortgage-related questions.
Tags: Aurora PNC, Bank of America, Citigroup, current housing market, distressed properties, Foreclosure, JPMorgan Chase, MetLife, Mortgage, OCC, shorewest, Shorewest Realtors, Sovereign, SunTrust, U.S. Bank, US Ofice of the Comptroller of the Currency, Wells Fargo, Wisconsin Mortgage, Wisconsin Mortgage Corporation