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Banks to Pay $9.3 Billion in Foreclosure Abuse Settlement
By Sarah Pierce
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UPDATE: Payments in the Bank Foreclosure Abuse Settlement will begin April 12, 2013. Millions of borrowers can expect to receive a check in the mail by the end of the month.
Thirteen banks will pay a total of $9.3 billion to settle federal charges they engaged in foreclosure abuse during the U.S. housing crisis. Borrowers whose mortgages were serviced by one of the banks can expect to receive between a few hundred dollars and $125,000 from the settlement.
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve announced the final mortgage abuse settlement Thursday, which includes Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
The federal agencies accuse the banks of engaging in improper foreclosure methods in 2009 and 2010 that included wrongful denial of modifications, improper fees, flawed mortgage servicing and processing practices, and robo-signing – the process of rapidly approving numerous foreclosures and submitting them to courts without having read them to determine if they were proper.
Rust Consulting Inc., which specializes in class action settlement administration, will handle distribution of the funds and is expected to contact affected homeowners by the end of March. Eligible foreclosed borrowers will start receiving payments in April from a $3.6 billion fund. The remaining money will go to struggling borrowers in the form of assistance, including loan modifications and forgiveness.
Over 4 million people whose homes were in any stage of foreclosure in 2009 or 2010 and whose mortgages were handled by one of the 13 mortgage services will be covered by the foreclosure abuse settlement. These borrowers will not need to take any action to receive their payments, nor will they have to waive their legal rights to sue the banks as a condition for payment, according to reports.
Top Class Actions will provide further details on the Bank Foreclosure Abuse Settlement once official notice of the deal is published.
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Updated April 10th, 2013
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All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions
72 thoughts onBanks to Pay $9.3 Billion in Foreclosure Abuse Settlement
I am really upset!!! My home was serviced through HomEq Loan Servicing!! They sold my home and I found out 3 days later! I thought we were in a hold for a modification!! They have since gone out of business and I have been told I was not eligible even though WF held the loan!! I have been upset and hurt every since, but I keep on going! They ruined my life!!
It is such a shame that the brunt of the folks from 2007 -2009 are not eligible although they were walking away from their houses since the bank did not want to work with them. My house was foreclosed in late 2008. I had a buyer, but Litton Loan Svc/Chase did not want to allow the sale, so instead I walked away from it. I applied for this lawsuit and they said that I am not qualified. I guess the bank rules.
the fines are too small and there is no jail time in this. that is a must!
I guess I’ll see some money. Had very bad screwing by BofA. Wells Fargo also acted improperly, but not as bad as BofA, may it be forever cursed. I’d love to see BofA executives face prison time. But sadly, there is one law for the little guy and another for the big crook.
Jean – the EXACT same thing happened to me…only with BOA. Had offers for 100K but they refused…and ended up selling it for 75K off of a 275K or so loan. Think Fannie Mae owned, but BOA serviced. Reps were TOTALLY CLUELESS people and I got a different story each time I called. This went on for about 2 years. Horrible, horrible experience. I hope BOA goes under because of their incredible negligence.
I just want to know why some people are eligble for one settelment program and not the other?
I was with Countrywide and the sent a letter that Wells Fargo had the loan now and didn’t know where to send the payment .When I did find out and sent the payment it was late and my payment went up $1000.00 more per month. I could not talk to a live person to resolve this, even my attorney was unable to speak to anyone. Then they foreclosed on my home.
Wells Fargo approved our Home modifications, accepted our re worked payment schedule and after 5 months forclosed on our home. Our loan was $275.000.00, they wouldn’t do a short sale, or a deed in lue, sothey forclosed and within 28 day they sold it for $75,000.00. We lost everything, or at least our original 75,000.00 down payment and money spent on improvements.
Have had many loan modifications and thousands thru Bank of America. How can I get involved work lawsuit
Bought house 2005 chase mortgage. In foreclosure