Thousands of foreclosure victims from 2009 and 2010 will receive anywhere from a few hundred dollars up to $125,000 in compensation as the result of large banks settling charges of foreclosure abuses, including filing false documents in courts.
The compensation is part of two settlements announced Monday that total more than $18 billion.
Bank of America is paying the lion’s share – $10 billion – mostly to reimburse Fannie Mae for bad loans Countrywide Financial sold it prior to Bank of America taking over the company.
“Separately, federal regulators reached an $8.5 billion settlement on Monday to resolve claims of foreclosure abuses that included flawed paperwork used in foreclosures and bungled loan modifications by 10 major lenders, including JPMorgan Chase, Bank of America and Citibank. About $3.3 billion of that settlement amount will go toward Americans who went through foreclosure in 2009 and 2010, while $5.2 billion will address other assistance to troubled borrowers, including loan modifications and reductions of principal balances. Eligible homeowners could get up to $125,000 in compensation,” wrote the New York Times.
“The comptroller’s office and the Federal Reserve said on Monday that the settlement “provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process.”
“The relief will be distributed to homeowners even if they did not file a claim for their loan files to be reviewed.”
