According by news released by the A.P. and the Wall Street Journal, compensation checks will start going out this month to many of the 4.2 million U.S. homeowners who were undergoing foreclosure proceedings or had foreclosed homes in 2009 or 2010. These payments are likely to range from $300 to $125,000, and a projected 80% or so of borrowers will receive less than $1,000. That said, many of the almost 500,000 homeowners who had applied for reviews on their foreclosure cases will receive double payments.
In total, the largest payments are set to be delivered to 1,082 U.S. military members retirees who utilized the Servicemembers Civil Relief Act, and who were wrongly foreclosed upon. Some 53 of these individuals were put through foreclosure despite not even being in default on their payments at the time. An additional 130 military members who did not utilize the Act but were wrongly forced to foreclose despite not being in default are scheduled to get $15,000. A few may receive additional compensation to account for lost equity.
A total of over 7,000 borrowers whose homes were lost to foreclosure proceedings are scheduled to receive between $25,000 and $31,250. This number includes individuals who were foreclosed upon while making modified payments to their mortgage.
The vast majority of homeowners who are qualifying for these funds are those whose mortgage modification requests were denied. These individuals are slated to receive between $1000 and $2000 each. Homeowners who never went through mortgage adjustment proceedings, as well as homeowners in other categories, are slated to receive between $300 and $600. All payments are slated to be mailed by mid-summer.
Consumer advocates decry this proceeding, believing that in many cases, the amount of financial damage done by fraudulent or manipulative lenders has been far in excess of the reparations offered. If you have questions about these reparations, visit the website here, but keep in mind that most borrowers won’t know how much they are likely to receive until they have their checks in-hand.
According to the Wall Street Journal, the payments are being handled by Rust Consulting, which has sent notification postcards to affected homeowners. If your home was in foreclosure during 2009 or 2010, and you did not receive a postcard, we encourage you to call 1-888-952-9105, even if your foreclosure proceeding was not completed. You may be eligible for monetary reparations.