Jan
16

Banks to Provide $8.5 Billion in Foreclosure Assistance

January 16, 2013

chicago real estate foreclosureTen banks that have been accused of deficient foreclosure practices and mortgage servicing will provide $8.5 billion in cash payments and other assistance to homeowners. The deal will also compensate those affected by ‘robo-signing’ in which foreclosures were processed using forged or unreviewed documents.

More than 3.8 million borrowers who had foreclosed real estate in Chicago in 2009 and 2010 will receive assistance. All eligible borrowers should hear from payment agents by March 31, and individual compensation will range from hundreds of dollars up to $125,000.

The ten banks that are part of the settlement are as follows:

  • Aurora
  • Bank of America
  • Citibank
  • JP Morgan Chase
  • MetLife Bank
  • PNC
  • Sovereign
  • SunTrust
  • U.S. Bank
  • Wells Fargo

Under the new settlement, homeowners will be placed into categories in order to speed up the payment process. These categories will range from homeowners who were denied a loan modification to those who have lost their home to foreclosure. There will be no case-by-case evaluation, rather, all homeowners in each category will receive the same payment amount.

Some homeowners are worried that being placed into categories means they won’t receive the compensation they deserve, but the Office of the Comptroller and the Federal Reserve believe that this new settlement will help speed up the recovery of the housing market and allow struggling homeowners to get back on their feet more quickly.

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