New York, NY: An agreement has been reached between federal regulators and 10 major US banks totalling $8.5 billion in direct payments, loan modifications and forgiveness of deficiency judgements of mortgage foreclosures. According to a report by CNN Money, the deal includes borrowers whose homes were in foreclosure in 2009 and 2010.
The Banks involved in the agreement are Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
The monies will break down into $3.3 billion in direct payments to borrowers and $5.2 billion in other types of assistance.
The settlement is the result of an investigation into the mortgage foreclosure practices of 14 banks. It was brought by the Federal Reserve and Office of the Comptroller of the Currency (OCC) in 2011. Known as an 'enforcement action', the investigation required that the banks hire independent consultants to investigate alleged foreclosure abuses and subsequently compensate victims. The process proved slow going, so much so that Federal officials extended the deadline for borrowers to apply to have their cases reviewed last year, but as of December 13, just 356,000 of the estimated 4.4 million eligible had done so, according to the OCC (CNN Money).
The four banks not included in this settlement are still in discussions with the Foreclosure Review to reach similar agreements in principle. Those financial servicer providers are Ally, OneWest, EverBank and HSBC.