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Independent Foreclosure Review to Yield Additional Payments for Borrowers

Paying Money One BHOn August 8 and 15, 2016, the paying agent, Rust Consulting, Inc. (Rust) will mail payments to nearly 650,000 eligible borrowers of Federal Reserve supervised servicers who cashed or deposited their initial checks from the Independent Foreclosure Review (IFR) Payment Agreement by the March 31, 2016 deadline, according to a recent release from the Federal Reserve.

The redistribution of funds outstanding from the IFR Payment Agreement attributed to Federal Reserve supervised servicers are reported to provide a total of over $80 million to borrowers. This will be consistent with the Federal Reserve's intention to distribute the maximum amount of funds to borrowers potentially affected by underprovided servicing and/or foreclosure practices.

According to the Federal Reserve, as of July 2013, the Independent Foreclosure Review ended at all mortgage servicers supervised by the Federal Reserve that were subject to foreclosure-related enforcement actions. These mortgage servicers came to 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 approximately $10 billion in cash payments and other assistance to assist borrowers whose primary residence was involved in a foreclosure process in 2009 or 2010 at one of the participating servicers.

The release states that under the redistribution, every eligible loan will receive a payment of $124.30 and borrowers receiving a redistribution payment will have the opportunity to request several things including the name on a payment to be changed, the payment to be split, or the payment to be reissued. All of these requests must be received by Rust no later than September 30, 2016. Likewise, in early November, there will be a one-time mailing of redistribution check reissuances to fulfill all reissue, payee change, and split check requests. Additionally, all redistribution checks will expire on December 31, 2016.

The Federal Reserve notes the servicers that are covered include GMAC Mortgage, Goldman Sachs/Litton Loan Servicing, Morgan Stanley/Saxon Mortgage Services, and SunTrust. They also note that some borrowers whose loans were serviced by HSBC or JPMorgan Chase may be additionally covered. For those unsure of their status, the Federal Reserve recommends HSBC and JPMorgan Chase borrowers contact Rust at 1-888-952-9105 to determine if their loan was serviced by the part of the servicing operations of those two companies that is supervised by the Federal Reserve.

Additionally, the release states that for borrowers who did not cash or deposit their initial distribution check by the March 31, 2016 deadline, the Federal Reserve instructs Rust to correct any applicable tax reporting from that payment with the Internal Revenue Service and mail the borrower a corrected tax reporting document. The release says those corrected tax reporting documents are expected to mail in August.

About Author: Kendall Baer

Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, TX. Born and raised in Texas, Kendall now works as the online editor for DS News.

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