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Checks to be sent to some foreclosed homeowners this week

Local homeowners in any stage of foreclosure in 2009 and 2010 will receive checks in the mail beginning Friday, government regulators announced Tuesday.

More than 4.2 million affected borrowers nationwide stand to receive some cash compensation. Payments range from $300 to $125,000, said the Federal Reserve Board and U.S. Office of the Comptroller of the Currency.

Most borrowers covered under the settlement agreement are slated to receive a $300 check. Payments will be made in waves through mid-July, the federal agencies said.

Not everybody eligible lost their home, said Bryan Hubbard, Comptroller spokesman.

The minimum $300 payment goes to people for potential errors such as their home going into foreclosure even though the bank approved a loan modification. People receiving the maximum payment of $125,000 include those with a foreclosure completed on their home, but their mortgage was not in default.

In an amended federal settlement agreement reached this year — a second, separate agreement from 2012’s National Mortgage Settlement — 13 mortgage service firms are required to pay $9.3 billion to resolve faulty foreclosure processes.

The agreement replaced orders made in 2011 for mortgage servicers to do case-by-case reviews of foreclosures — known as the Independent Foreclosure Review. Instead, servicers must compensate borrowers they have already identified directly, the Federal Reserve and Comptroller said.

“In the 2011 enforcement action we determined the eligibility and we said all the borrowers in any stage of foreclosure in 2009 or 2010 are eligible in the Independent Foreclosure Review,” Hubbard said. “That entire universe is getting paid something in the settlement.”

People who filled out the request for review will receive more money than people who didn’t.

On March 18 people eligible were sent postcard notices about payments they will receive from the agency hired to handle payments — Rust Consulting Inc.

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