Florida Foreclosure Victims May Catch a Break: Feds Order Banks to Reimburse Homeowners
Posted By Larry Tolchinsky on April 14, 2011
Maybe the worm has turned for victims of Foreclosure Fraud. Today, there’s growing national news coverage that the federal government (e.g., via a joint effort by the Federal Reserve, the Office of Thrift Supervision and Office of the Comptroller of the Currency) is forcing 16 different mortgage lenders (and mortgage servicers) to reimburse money back to homeowners who these banks unfairly forced into foreclosure.
That’s right: the banks are going to be made to pay money to their former mortgagees, the homeowners who lost their homes in foreclosure proceedings. How far back? According to the news reports, foreclosures during 2009 and 2010 are targeted.
Which banks are involved here?
Among the banks listed by the feds are Bank of America, Citibank, JPMorgan Chase and Wells Fargo. These, of course, are the four biggest banks in the United States so it should come as no surprise that they are on the list. Others include Ally Financial Inc., Aurora Bank, EverBank, HSBC, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, SunTrust Banks, U.S. Bank, Lender Processing Services and MERS.
How much are these reimbursements?
There is no set amount established here – this is not like the settlement of a class action lawsuit, where all the parties must share pro-rata proceeds. Instead, the government is requiring that these financial institutions employ an outside, independent third-party auditor to go over their books. The auditor will report to the lenders (and servicers) bad foreclosures that it finds, and the amount of each “financial injury.” The institutions will then forward that amount of money to the borrower that suffered that injury.
When does this begin?
Soon. The banks (and servicers) have 45 days to go out and find the auditor. No details on how long the auditor has to do its job. (Although, that auditor will have lots of pressure to do that job fast: lots of fingers will be drumming on lots of tabletops, both those of the lenders anxious on what they have to fork out as well as the homeowners who are anxious for their cash.)
What can you receive?
There’s no limits according to the federal government. No cap on what the banks may have to pay in total. No cap on what each individual homeowner may receive. What the homeowner will receive will be determined by the auditor. No word yet on whether or not the homeowner can negotiate with the auditor on what that amount should be, or how the homeowner can challenge the auditor’s decision. Filing a lawsuit is always an option, of course.
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Finally, I truly hope there is a little justice for some of us who in fact have lost our home. I was very proud of being a homeowner and after 10 years of home ownership I lost my home. I had financial hardship and was late during my last year. My attempts to resolve this issue with Ocwen Loan Services who represented HSBC turned into a disaster, while negotiating a remodification and dealing with None other than India My payments were lost in the Mail supposedly. But yet one out of two payments would be credited when they were both mailed in the same Priority envelope. Hmmmm.
Meanwhile, the bank who was not willing to negotiate sold my home for a fraction of what I owed but were not willing to rent the property to me so that the youngest of my two boys could at least finish his school years in a home he grew up in ! I dont expect hand outs but it would have felt that my efforts to provide for my family did not go invane. Thanks for posting this information.
Sad Former Home Owner