Banks to pay $3.6 billion to millions of homeowners in wrongful foreclosure settlement
The nation's largest banks will begin sending payments this week to millions of Americans who may have been wrongfully foreclosed on during the housing crisis.
A total of $3.6 billion in cash will be distributed to 4.2 million borrowers who lost their homes or were at risk of foreclosure, the Federal Reserve and the U.S. Comptroller of the Currency said Tuesday. Payments will range from $300 to $125,000. About 90 percent of borrowers whose mortgages were serviced by 11 of the banks will receive payments by the end of April, the agencies said.
The last group of payments is expected in mid-July.
The banks, which include PNC Financial Services, Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, reached a settlement with the federal agencies in January. They agreed to pay a total $9.3 billion in cash and in reductions of mortgage balances.
PNC is paying $69.4 million into the settlement fund, according to the U.S. Comptroller of the Currency. The agency did not have the number of borrowers involved, and PNC declined to comment.
In addition, PNC agreed to provide loss-mitigation and other foreclosure-prevention measures valued at $111 million, the agency said.
The 13 banks settled the regulators' complaints that they wrongfully foreclosed on borrowers with abuses such as “robo-signing,” or automatically signing off on foreclosures without properly reviewing documents.
The settlement covers borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010. It ended an independent review of loan files that the two agencies ordered in 2011.
Banks and consumer advocates had complained that the loan-by-loan reviews were time-consuming and costly and didn't reach many affected borrowers. Some questioned the independence of the consultants who performed the reviews, who often ruled against borrowers.
Consumer advocates have criticized the deal, saying the regulators settled for too low a price by letting banks avoid full responsibility for wrongful foreclosures.
The other banks in the settlement are HSBC, MetLife Bank, Sovereign, SunTrust, U.S. Bank, Aurora, Morgan Stanley and Goldman Sachs.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Google Maps opens business doors to online views for shoppers
- Utility regulator seeks $639,000 in penalties from electric supplier
- Many in Pennsylvania can still get benefit of Affordable Care Act
- EDMC to cut costs, roll out new grant
- Indian firm plans exports of ethane from U.S. shale fields
- Designer sues Barnes & Noble over backpack profits
- Energy sector powers Pa. pace
- Back-to-school season deals just a click away with new services, apps
- 5 apps that make you say ‘wow’
- Few homeowners expected to benefit from Bank of America’s $16.65B settlement
- In 10 years as public company, Google has reshaped IPO landscape, more