For those who have been waiting for years for their checks from the Independent Foreclosure Review began receiving them this week. And those recipients are furious and are now considering a class action lawsuit against the banks that were found to have cut corners and acted illegally in the foreclosures process that plagued the nation several years ago.
Two years in, the bank regulators that took enforcement action against mortgage servicers say that for many of the four million Americans eligible to receive monetary settlements, they should be receiving and depositing their checks at some point this week. Only problem is, many of those Americans have indeed begun receiving their checks. Most are for less than $500 – and it’s far less than what they expected. They’re angry and say the payouts don’t even begin to cover the wrongdoing by the banks and servicers. There are even a few lawmakers who are expressing outrage.
Social Media Role
Social media is exploding. The common sentiment is that it’s time for consumers to come together and form their own class action lawsuits. Thousands say they’re received their checks and about that many are saying they’ve had enough of the lies and delays. More checks are expected to be delivered this week too. A few of the comments from Facebook, message boards and Twitter – along with a few that have hit our inboxes, as well, include:
My check was $800…not nearly enough to make up for losing my home…
I got my check today – $500.00. My house went into foreclosure, I applied for a modification, never heard back – they basically ignored me. I had thought I would have fallen into the $6000 category, since they ignored my request.
We received our check today; it was $400.00. We should have got $3,750.00. We were covered under Bankruptcy law. The home has been sitting vacant for almost 6 years.
I received a check today for 6K. I was in the category that should of paid 50k. Class action time!!!!!
Pennies on the Dollar
Many homeowners were told they would receive settlements that totaled close to $50,000 and instead, they’re receiving pennies on the dollar of what they were expecting. Worse, one woman even reported receiving a $300 check, tried to deposit and was told on several occasions over the course of the day that the account the check was drawn on did not have the funds to cover it.
There exists an option for many of borrowers under the Independent Foreclosure Review settlement. Remember, this was hashed out between at least 13 banks and similar lenders earlier this year. They were told they would have the opportunity to continue their legal battles with other lawsuits if they felt they weren’t being treated fairly. Many say that’s exactly what they intend to do.
Unfortunately, not everyone agrees. Different regulators, along with the Comptroller of the Currency and the Federal Reserve have said the payments are final. Fortunately, the borrowers were not forced to waive any future legal claims against their servicer as a condition for receiving the payouts, which is interesting considering how badly the banks and government wanted this to just go away.
The company overseeing the payouts, Rust, has already sent out letters requesting additional information from borrowers with requests for even more information. This is causing even more delays and is proving to be frustrating as some say they’ve provided the information multiple times,
How many times do I need to send these clowns a photo from my driver’s license?
Less than one month ago, 4.2 million borrowers received notification that their eligibility was being reconsidered, too – yet again.
Both government agencies seem to have been giving fair warning last week when they announced most payments would be $300. They did say some would be up to $125,000, but clearly, the recipients believed what they had been told earlier is what they were expecting. In fact, around 70% won’t receive more than “a few hundred dollars”.
It’s not known how many of the 9,000 borrowers who qualified for compensation ranging from $24,000 to $125,000 will actually see amounts in that amount; however, it’s now becoming clear that at a least a few aren’t receiving anything close to that amount.
More than 90 percent of the total payments to borrowers at those 11 servicers, listed below, are expected to have been sent by the end of April. This too is causing more than a few angry folks who believed they would be receiving their monies in late March and at the latest, early April. Another theory comes from Alys Cohen of the National Consumer Law Center, who said,
People who managed to get far enough along in the (modification) process, many of them will get a decent payment…But people who suffered servicer neglect clearly are not getting compensation for the harm they suffered.
Firms were hired for a total of $2 billion for 18 months, in an collective effort that was, at best, considered scattered, poorly managed and ineffective. Not only that, but because of those shortcomings, many borrowers whose mortgages were serviced by those specific lenders and banks will receive their checks in “waves”. In other words, there wasn’t one fell swoop of all bailouts. It could be late July before the final wave is being mailed out. The banks include Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
Is the Government Broke?
Many are questioning why they’re receiving far less than what they were told to expect, why the payments are late to start with, why they’re coming in waves and why so many “in the know” are defensive. The answer just might be found in that one woman’s experience who attempted to deposit her $300 check at the bank only to be told it was not worth the paper it was written on. If that’s true, then the problems are far worse than anyone could have predicted – and that means there are secrets being kept and loyalties being maintained that will surely boggle the mind if they ever come to light.
We would love to hear from anyone who has a stake in this game. Share your thoughts with us – are you expecting a payout? Have you received it yet? If so, is what you were led to believe it would be? We’re receiving emails, but we invite you to join the conversation on our Facebook page. This is a topic that affects millions of us – and we want to know your story.