$26 Billion Foreclosure Settlement: Millions Of Borrowers Eligible

millions of homeowners can qualify for settlement

Millions of American borrowers who suffered financial losses due to the fact that the mortgage lenders dealing with their home loans played loose and fast while processing foreclosures have now two ways to get a payback. The settlement of $26 billion was inked two weeks ago between five nation’s largest banks and state attorneys general and consumers are now able to tap it.

However, the other settlement was presented earlier and has been almost forgotten, though, in some cases it could lead to even larger payoff.

Investigation By Independent Consultants

Last April 14 the major mortgage servicers, including Citibank, Chase, Bank of America, MetLife Bank, HSBC, Wells Fargo and PNC Mortgage agreed to hire independent advisors in order to investigate foreclosure abuses and compensate those borrowers who suffered financial harm and had to take out online cash loans to make ends meet. Basically, it was a part of enforcement actions provided by the federal authorities. Under this program nearly 4.3 million mortgage borrowers whose houses were foreclosed in 2009 and 2010 will get a chance to make a request for an independent review of the way their foreclosures were processed.

Homeowners Could Be Repaid In Full

The exact sum of money the borrowers will obtain hasn’t been determined yet. Still, if an independent review notices some financial injury (for instance, the lender went forward with foreclosure with no valid claim to the property or charged inappropriate fees) the homeowners could get a full repayment for their losses. The cost of regaining a home that was wrongfully lost could be also repaid by the compensation if the facts of the case are warranted.

Robo-Signing Scandal

In fact, it is the robo-signing scandal that caused the Independent Foreclosure Review. The mortgage lenders’ treatment of borrowers in the process of foreclosure was exposed in this scandal. The banks recreated the lost documents, had employees of low level who were not acknowledged of what they attested to sign legal papers and bent the rules which required lenders to halt foreclosures in case the borrowers sought mortgage modifications.

Unlike the settlement of $26 billion with the state attorneys general, the homeowners didn’t have to lose their houses to obtain compensation.