Borrowers eligible for payment will soon be receiving replacement checks for the funds they were scheduled to receive under the Independent Foreclosure Review Payment Agreements, according to an announcement from the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) on Wednesday.
The paying agent, Rust Consulting, is mailing the checks this week to borrowers who are eligible under the payment agreements and have not yet cashed or deposited their check, according to OCC. The newly mailed checks are intended to replace uncashed checks that have expired.
The Independent Foreclosure Payment Agreements were originally reached in January 2013 between federal bank regulatory agencies and 13 mortgage servicers. As part of the agreements, the servicers agreed to provide cash payments totaling $3.6 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, according to OCC.
The 13 servicers are (listed alphabetically) Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo, OCC said in its announcement.
Payments were mailed to nearly all of the 4.2 million eligible borrowers of these 13 servicers beginning in April 2013, with payments ranging from several hundred dollars to $125,000 plus lost equity, according to OCC. More than 3.4 million of those checks (totaling $3.1 billion dollars), or about 87 percent of the payment required of the servicers, had been cashed or deposited as of January 2015. The remaining outstanding checks (about 600,000) originally issued to borrowers of those 13 servicers have expired; the paying agent, Rust Consulting, has been directed to conduct additional services for updates addresses as part of an ongoing effort to reach the in-scope borrowers.
This week's mailing represents the third attempt to reach the borrowers who have not yet been found or not yet cashed their check. The checks will be void if not cashed or deposited within 30 days of the issue date. Those who have already cashed or deposited their check will not receive additional payment.
The federal bank regulatory agencies reached similar foreclosure review payment agreements after January 2013 with two additional servicers, GMAC Mortgage and EverBank, according to the OCC's announcement. Payments had been mailed to all of the in-scope borrowers under these agreements by the end of 2014; Rust Consulting is expected to mail replacement checks by May 2015 for checks that have not been cashed or deposited.