If you have been following the news about the mailing out of foreclosure fraud settlement checks over the past few months, then you probably saw this coming. Homeowners are receiving their checks in the mail and – you guessed it – they’re getting madder by the payout. Homeowners who say that they lost everything and expected to be compensated are receiving checks for $300 or slightly more in most cases, and they say that they payments are more like a “slap in the face” than justice being served. To make things even more problematic, many calculated their expected benefits before the money arrived using a table distributed by federal regulators. Unfortunately, that table is no guarantee of compensation, as Adam Crain, who lost his home to foreclosure while serving aboard a naval vessel in the Middle East, learned when he received a check for $800 instead of the $125,000 he was expecting due to violations of his rights under the Service Members Civil Relief Act (SCRA). “This is what happens when there is no oversight,” he complained. Crain’s bank, Wells Fargo, has said in response that after evaluating Crain’s situation it determined that the foreclosure was “handled appropriately” and did not qualify for the maximum payout amount for service members of $125,000.
The 13 banks involved in the foreclosure fraud settlement with the Office of the Comptroller of Currency (OCC) will send out $3.6 billion in payments to borrowers. The problem is that the checks are part of a blanket settlement that allowed banks to skimp on evaluating specific individuals’ circumstances. Sources intent on remaining anonymous but claiming to be “familiar with the evaluation process” have said that the settlement is not entirely fair and that some people who deserve more money will not get it while others who do not deserve payouts will get them.
by Carole VanSickle