The Federal Reserve has announced that borrowers who do not claim the funds owed to them from the Independent Foreclosure Review (IRF) by a certain date will forfeit that money and it will be redistributed to eligible borrowers who have already cashed or deposited IFR relief checks.
The Independent Foreclosure Payment Agreements, which are overseen by the Fed and the Office of the Comptroller of the Currency, were originally reached in January 2013 between federal bank regulatory agencies and 14 mortgage servicers. As part of the agreements, the servicers agreed to provide cash payments totaling $3.9 billion to borrowers with a mortgage serviced by one of these servicers, their affiliates, or subsidiaries whose homes were in any state of foreclosure during 2009 and 2010. The Fed, Office of Thrift Supervision, and the OCC, through on-site reviews, found that “deficiencies and unsafe and unsound practices in mortgage servicing and foreclosure processing at several large residential mortgage servicers.”
According to the Fed’s announcement, the deadline is December 31, 2015, for borrowers of the servicers regulated by the Fed who have not cashed or deposited their original checks to request a replacement check. The deadline for cashing or depositing these checks is March 31, 2016, according to the Fed.
As of mid-October, approximately 91 percent of the total value of the funds issued under the IFR Payment Agreement to borrowers of services regulated by the Fed have been cashed or deposited—which comes to approximately $798 million, the Fed said in its announcement. In all, eligible borrowers have cashed or deposited more than $3.5 billion in relief funds under the IRF Payment Agreement.
Any unclaimed funds will be redistributed by the paying agent, Rust Consulting, to borrowers of these servicers who have previously cashed or deposited their original checks as directed by the Fed. The maximum amount available under the IFR Payment Agreements will be distributed, according to the Fed.
The 14 servicers are (listed alphabetically) Aurora, Bank of America, Citibank, GMAC Mortgage, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.