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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
Nationstar Mortgage Company should be included in this suit. They are a disgrace and most definitely are not a company I would recommend to anyone. They offer loan modification programs and then you default on your loan after they change the interest rate. My payments went from $512 to $842 a month. How did that help me? Now I am on the brink of foreclosure and don’t know where to turn.
Agreed. They bought the bank I was previously working with on a loan mod and then were unresponsive to repeated attempts to even make contact with this company. I made contact with them ONE time a couple weeks before foreclosure and the person on the line said it was now too late to run title and conduct an appraisal on the property to modify the loan before the the foreclosure action. Ironically, however, I had already been charged for an appraisal a month prior and doing a title search takes all of ~ 1 day to conduct. When I informed the agent of this and that I was recording the call he promptly hung up on me. They never answered my calls again never returned any messages. Then after they sold my house with a $330K deficiency they promptly sent me a tax bill for this difference (I had to chuckle). I may have been born at night but it wasn’t last night! I have all the documentation so if there is ever a class-action picked up on this poor excuse for a company please let me know!
I had a house at 31126 pine rose dr
Spring, tx 98632
That was foreclosed 2/2009 by Bank of America
Thank you Julie for the update!
I got my notice today that I should be getting a check in four to eight weeks. It did not indicate how much, but the notices have been sent.
I know that it said we will be contact by the end of March but please keep us posted if anyone has received info on the settlement payment. It would be nice to know since we all have been thru alot
Didn’t lose my home but got a modifaction from citimorgage, what a joke. The interest rate was lowered for a short time but didn’t which helped but now the interest rate is higher than the going rates are now and keep climbing. I can’t seem to get it refiananced now cause I owe more than what it is now worth!
My home was with suncoast federal credit union, but the loan came from somewhere else i loss my home in 2007 and was given no time to save it. now i have bad credit and they are wanting the money for a house they they took from me in less than a month while i sit homeless still trying to recover.
How about GMAC they sold my loan to Midwest Mortage now Midfirst, never the saler nor the buyer in informed me.Which they were both required by letter and a certified letter, I got known but a coupon book with no letter of explanation. When I when to make my payment thats when I was informed that loan had been sold this was Dec. and the coupon book said payment due in Feb. when I called to make payment they was already 2 months late and this was the end of Dec. they just kept getting worse no one would motify my loan nor Hud which my house was, they send me motification pa-pers but no one responded to me. I WANT MY HOUSE BACK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
How is this not also criminal? The fines barely scratch the money owed previous homeowners, time missed from work, the stress, stolen property when they lock you out of a home they foreclose on before the possession date, the trama to families misplaced, the overall loss of money for the numerous unreturned calls, the actual calls, the copies, the faxes, the certified mailings…on and on. The sure have put a new spin on the American Dream!!
We were in foreclosure twice. First time I’m still not sure how we got out of it. I was working out of state. 2nd time around I wrote to EVERY representative of our Govt. I received one reply by phone from our State Senators office.If it hadn’t been for them and an aide in that office we would have been on the street. I tried EVERYWAY there was to get CITIFI to work with us but it was same old song and lost dance..not enough income…no paperwork…couldn’t reach people who wrote US letters…paperwork out of date… I even tracked down the powers that be for Citi and left them messages at their home offices…etc. etc. etc. I wrote the President.of the United States.. Fat lot of good that did. I actually received a reply 4 months after the sale date of home came and went. Believe me I made sure they were cognisant of the FORECLOSURE Date. AND what a joke HUD was. The counselor knew less than I did! We originally were with Associates who then turned into CITIFI Mortgage. At one point with Citifi I had a young man calling for payment and when I said as soon as I could I would he said for me to get another job. I said I couldn’t beacuse I worked everyday of the week between 12/16 hours per day. Great AMERICAN DREAM. WE WERE OUR OWN BOSS. But when the spouse became ill problems started in and wouldn’t quit. We tried having someone help us and all they did was take our money and not call us.I am still not over the experience. My mental staus is iffy because of eating dreaming and living the loan modification torture they put us through. We’ve been making payments since August 2012. You can bet I stay in touch with our FAVORITE SENATOR’S office and the ABSOLUTELY MARVELOUS YOUNG MAN who helped us. Citifi tacked on so many different fees and whatevers that we owe 3 times more than the original loan. We had been down to $80,000. Now it is up and over $240,000. We are both in our 60’s and not much we can do anymore.