Federal Foreclosure Settlement Payments Now Available

The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (the Fed) reached a new agreement this year with several lenders that provides for aid to flow directly to homeowners. Mortgage loans that were serviced by Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, US Bank, Wells Fargo, or any of the affiliates or subsidiaries of theses lenders are eligible for payments if a foreclosure was in process during 2009 or 2010.

How much are the payments? Payments between $300 and $125,000 have been authorized under the agreement. Many homeowners have already been contacted by RUST Consulting, the company responsible for distributing payments, informing them that they are eligible. Payment amounts are determined by a formula that takes into account the various types of improper foreclosure tactics borrowers may have been subjected to.

Homeowners that we represent have already begun receiving checks from the Independent Foreclosure Review Payment Agreement. Checks our clients have received have ranged in amount from $300 to $6,000.

What if my loan was serviced by someone else? EverBank/EverHome Mortgage Company, Financial Freedom (One West), GMAC Mortgage, and IndyMac Mortgage Services (One West) are still being reviewed. They are expected to begin making similar restitution distributions in the near future.  If your loan was not serviced by any of the above listed servicers, the federal settlement does not apply to your servicer, and your only recourse is to bring a private legal action, or file a complaint with regulatory agencies.

What do I need to know? RUST Consulting and the checks they are distribute are NOT a scam. You are entitled to the payments they send you and can cash the check. Also, you should be aware that by cashing a check from RUST Consulting you are NOT giving up your right to sue you lender for the damages they caused you during the foreclosure process. If you believe you have been subject to an illegal foreclosure or unfair trade practices you should contact us to discuss whether we can help you.

For further information please contact me or visit my website. If you live in Beaverton, Hillsboro, or Portland Oregon, give me a call with your questions or comments, or post a comment to this blog.