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. In most cases, eligible 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. 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.
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.
March 18, 2013 Update: Borrower Information Postcards Mailed
On March 18, 2013, more than 4.2 million people were sent postcard notices about payments they will receive as a result of an agreement between federal banking regulators and 13 mortgage servicers. For more information, please call 1-888-952-9105, which is the number for Rust Consulting–the Paying Agent–that is printed on each postcard.
In January 2013, thirteen mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing reached an agreement in principle with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System to provide more than $9.3 billion in cash payments and other assistance to help borrowers. The sum includes $3.6 billion in direct cash payments to borrowers covered by the agreement and $5.7 billion in other foreclosure prevention assistance, such as loan modifications and forgiveness of deficiency judgments.
For the participating servicers, fulfillment of the agreement satisfies the foreclosure review requirements of enforcement actions issued by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Office of Thrift Supervision in April and September 2011 and April 2012.
As of February 28, 2013, the above agreement has been memorialized by amendments to the consent orders for each of the participating servicers. The amendments to the consent orders are publicly available on the websites of the Office of the Comptroller of the Currency (OCC), and the Board of Governors of the Federal Reserve System.
The OCC and the Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the Independent Foreclosure Review process.
Participating servicers under the agreement, including their current and former affiliates covered under the agreement, include:
|America’s Servicing Company||Countrywide||PNC Mortgage|
|Aurora Loan Services||EMC Mortgage Corporation||Saxon Mortgage1|
|BAC Home Loans Servicing||Goldman Sachs1||Sovereign Bank|
|Bank of America||HFC||SunTrust Mortgage|
|Chase||Litton Loan Servicing LP1||Wachovia Mortgage|
|Citibank||MetLife Bank||Washington Mutual (WaMu)|
|CitiFinancial||Morgan Stanley1||Wells Fargo Bank, N.A.|
|CitiMortgage||National City Mortgage||Wilshire Credit Corporation|
As a result of this agreement, the Independent Foreclosure Review, which involved case-by-case reviews, has ceased at the participating servicers and been replaced with a broader framework allowing all of the borrowers of the participating servicers covered by the agreement to receive compensation significantly more quickly.
Borrowers Covered Under the Payment Agreement
Borrowers whose mortgage loan was serviced by one of the thirteen participating servicers and who were involved in a foreclosure action on their primary residence between January 1, 2009, and December 31, 2010, will receive compensation. Borrowers are included, whether or not they filed a request for review form. Borrowers are not required to take any additional steps to receive payments.
Borrowers covered by the agreement are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.
A Paying Agent, Rust Consulting Inc., has been retained to administer payments to borrowers on behalf of the servicers. Borrowers covered by the agreement are expected to be contacted by the Paying Agent by the end of March 2013 with additional information regarding their payment.
Receiving a payment will not prevent borrowers from taking any action they may wish to pursue related to their foreclosure. Servicers are not permitted to ask borrowers to sign a waiver of any legal claims they may have against their servicer in connection with receiving payment.
Borrowers can call Rust Consulting, Inc. at 1-888-952-9105 to update their contact information or to verify that they are covered by the payment agreements.
1. Although not part of the Independent Foreclosure Review, on January 16, 2013, Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.) reached similar agreements in principle with the Federal Reserve related to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. With the addition of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.), nearly 4.2 million borrowers will receive a total of $3.6 billion in cash compensation while an additional $5.7 billion will be provided by the thirteen servicers for mortgage assistance.