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April 11th, 2013

Your foreclosure check is in the mail

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Buying justice macroA total of $3.6 billion will be sent to 4.2 million borrowers between April 12 and mid-July for borrowers who were involved in a wrongful foreclosure action between Jan. 1, 2009 and Dec. 31, 2010.

The payments are the result of an agreement finalized in February between thirteen mortgage servicers and the federal government. During the height of the foreclosure crisis, several loan servicers neglected the proper foreclosure-review process and signed off on foreclosures without fully exploring foreclosure-prevention   options.

The 13 mortgage servicers include:

  • Aurora
  • Bank of America
  • Citibank
  • Goldman Sachs
  • HSBC
  • JPMorgan Chase
  • MetLife Bank
  • Morgan Stanley
  • PNC
  • Sovereign
  • SunTrust
  • U.S. Bank
  • Wells Fargo

The first set of payments will range from $300 to $125,000 and will go to borrowers whose loans were serviced by 11 of the 13 servicers above. An announcement regarding loans serviced by Goldman Sachs and Morgan Stanley will be made in the near future.

Check your mail

Don’t throw away any mail from Rust Consulting, Inc., the paying agent for the funds.

Rust sent postcards in March 2013 to the 4.2 million borrowers who are eligible for a payment under the agreement, according to the Federal Reserve. If you received a postcard, you will receive a letter from Rust with a check enclosed, although some borrowers may receive a letter requesting more information before their payment can be processed. If you need to update your contact information or verify that you are covered by the agreement, contact Rust at 1-888-952-9105.

The payments will be sent in phases between April 12, when 1.4 million checks will be sent, and mid-July 2013, with more than 90 percent of the money sent by the end of April.

You can take further action

One of the most important provisions of the agreement is that borrowers are allowed to take action against their mortgage servicers even if they accept a payment now, says Andrew Pizor, a staff attorney with the National Consumer Law Center in Washington, D.C.,

“The money’s not that much in many cases,” says Pizor. “A payment of $300 won’t do much to help someone if they lost their home or are still struggling to keep it.”

Pizor says that borrowers who had a problem with their mortgage, such as a lender who lied when the loan was approved or a lack of compliance with any federal or state law, can raise that issue as a defense of the foreclosure even if it has already taken place.

“It’s important to talk to a lawyer or a housing counselor rather than try to deal with your mortgage lender yourself,” says Pizor. “I recommend going to LawHelp.org to find free legal help in your area.”

If you are struggling with your mortgage payment now or have already been foreclosed on, you can seek help from a HUD-certified housing counselor or contact the Homeowner’s HOPE Hotline at 888-995-HOPE or at www.MakingHomeAffordable.gov.

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One Response to “Your foreclosure check is in the mail”

  1. Jason Says: April 17th, 2013 at 12:48 pm

    It’s about time this happened. Some of those folks have been waiting upwards of 3 years for assistance. Let’s hope that the recovery keeps pushing forward so we don’t have to go through anything like this again.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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