4.2 million U.S. mortgage borrowers to receive payments

Payments to 4.2 million borrowers are scheduled to begin on April 12, following an agreement reached by the Office of the Comptroller of the Currency and the Federal Reserve Board with 13 mortgage servicers.

Read: Risky U.S. loan deals move forward

The agreement, which was reached earlier this year, provides $3.6 billion in cash payments to borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010, and whose mortgages were serviced by one of the following companies: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

Read: U.S. mortgage giant posts profits, Fitch warns of reforms

The payments will range from $300 to $125,000. For borrowers whose mortgages were serviced by 11 of the 13 servicers–all servicers but Goldman Sachs and Morgan Stanley–checks will be sent in several waves beginning with 1.4 million checks on April 12. The final wave is expected in mid-July 2013. Information about payments to borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley will be announced in the near future.

In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent–Rust Consulting, Inc. Borrowers can call Rust at 1-888-952-9105 to update their contact information or verify they are covered by the agreement. Borrowers should beware of scams and anyone asking them to call a different number or to pay a fee to receive payment under the agreement.

Read: Is Canada headed for a U.S.-style meltdown?

Accepting a payment will not prevent borrowers from taking any action they wish to pursue related to their foreclosures. Servicers are not permitted to ask borrowers to sign a waiver of any legal claims they may have against their servicer in connection with accepting payment.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.