Payments to 4.2 million borrowers are scheduled to begin on Friday, April 12 following an agreement reached by the U.S. Office of the Comptroller of the Currency and the Federal Reserve Board with 13 mortgage servicers.
The cash payments, ranging from $300 to $125,000, is part of a $3.6 billion settlement over foreclosure abuses reached between the government and the banks.
The agreement, which was reached earlier this year, provides 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.
For borrowers whose mortgages were serviced by 11 of the 13 servicers–all servicers but Goldman Sachs and Morgan Stanley–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 Goldman Sachs and Morgan Stanley will be announced in the near future.
In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent–Rust Consulting Inc.