By Aruna Viswanatha
Borrowers whose homes were in foreclosure in 2009 or 2010 can expect to receive between $300 and $125,000 under settlements reached between top banks and regulators earlier this year. The payments will begin going out on Friday, the Federal Reserve and the Office of the Comptroller of the Currency said on Tuesday. The agreements with 13 mortgage servicers, including units of Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, provided $3.6 billion in cash payments to borrowers who were at any stage of the foreclosure process at the height of the housing crisis.
Although regulators entered into the settlements in January, at the time they only provided estimates of what borrowers might expect to receive. On Tuesday the agencies said 1,082 borrowers who were active duty members of the military had foreclosures completed on their homes and would receive $125,000 each. About 50 borrowers who were not in default but had foreclosures completed on their homes will also receive the top $125,000 payout.
The largest numbers of borrowers, between 300,000 and 750,000, will receive between $300 and $600. Borrowers whose servicers did not engage with them in assessing loan modification options will receive $600 if they requested a review, or $300 if they did not, for example. Some 4.2 million borrowers are eligible to receive payments, and checks to 1.4 million of them will be sent out on Friday, regulators said.