The ""$8.5 billion foreclosure settlement"":http://dsnews.comarticles/ten-banks-reach-85m-deal-with-regulators-in-foreclosure-settlement-2013-01-07 on January 7 led to the conclusion of the Independent Foreclosure Review, and it also led to the layoff of more than 800 contract workers at ""JPMorgan Chase"":http://www.jpmorganchase.com/corporate/Home/home.htm, according to a report from the ""_Wall Street Journal_"":http://online.wsj.com/article/SB10001424127887323596204578241933778036120.html.
[IMAGE]The _Journal_ first reported 839 workers were laid off, including 529 in Brooklyn and 310 in Florence, South Carolina.
In an email, a spokesperson for JPMorgan confirmed the layoffs and said, ""Fewer homeowners are falling behind on their mortgages, so we need fewer employees to assist those who were struggling. We will work with affected employees to find openings at Chase or other local companies.""
The companies involved in the settlement were first required to hire third party consultants to review foreclosure actions that occurred in 2009 and 2010 as part of consent orders from regulators in 2011.
[COLUMN_BREAK]The foreclosure reviews were conducted for borrowers who requested them, and if financial harm was found to have occurred due to faulty foreclosure practices, borrowers were eligible to review up to $125,000.
According to the Office of the Comptroller of the Currency (OCC), by December 31, 2102-the review's deadline-only about 495,000 borrowers had requested a review.
Through the $8.5 billion settlement with 10 servicers, the Independent Foreclosure Review was replaced and the servicers were required, instead, to pay $3.3 billion in cash payments to about 3.8 million borrowers and another $5.2 billion for mortgage assistance.
In addition to JPMorgan, the other servicers in the settlement include Aurora, Bank of America, Citibank, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
According to a report from Fitch Ratings, the deal will benefit the companies involved since it marks an end to the foreclosure review process and will allow the banks refocus on services they provide.
The servicers will also be able ""to reassign internal staff that have been involved with the lengthy review process,"" Fitch stated.
Fitch also noted ""the agreements makes the final compensation structure clear and eliminates further cost for the independent reviews that will allow the servicers to better establish their future cost to service and potentially allow funds to be released for improvements in the quality of their services.""