Scant Relief in Foreclosure Payouts
By ALAN ZIBEL And DAN FITZPATRICK
WASHINGTONThe vast majority of borrowers being compensated for mortgage-related abuses will get $1,000 or less apiece, a sobering coda to a protracted attempt to help those who may have been placed into foreclosure as a result of banks' mistakes.
About 4 million borrowers will share $3.6 billion in cash as part of a settlement between federal regulators and banks accused of foreclosure-processing mistakes. U.S. regulators said Tuesday that banks wrongfully took away homes from 1,082 borrowers who were members of the U.S. military. Another 53 borrowers were found to have lost their homes despite not actually defaulting on their loans. Those 1,135 individuals will receive checks of $125,000.
Most borrowers, however, will see far less, with about 80% receiving checks ranging from $300 to $1,000, according to data released by the Office of the Comptroller of the Currency and the Federal Reserve.
Because the foreclosure review was shut down by regulators, it isn't clear in many cases how badly the borrowers were wronged, if at all.
And even though banks compensated borrowers, they didn't acknowledge wrongdoing.
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