You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

New agreement entitles wrongfully foreclosed borrowers to direct payments


Thousands of Southwest Ohio residents are set to receive up to $125,000 in compensation as part of an $8.5 billion agreement between the government and 10 mortgage service firms to resolve faulty foreclosures.

The agreement, announced Monday, scraps efforts by mortgage servicers to do case-by-case reviews of foreclosure. Instead, servicers must compensate borrowers they have already identified as being harmed, the Federal Reserve Board and Office of the Comptroller of the Currency said.

But no one involved with the settlement could say Monday exactly how the process will work.

About $3.3 billion would be direct payments to borrowers, regulators said. Another $5.2 billion would pay for other assistance including loan modifications. The agreement covers up to 3.8 million people nationally who were in foreclosure in 2009 and 2010. Most will receive from several hundred to several thousand dollars in compensation.

Fourteen mortgage servicers were ordered in April 2011 to offer the Independent Foreclosure Review, a free third-party case review, among other actions, as the result of an investigation into foreclosure abuses.

Approximately 144,700 Ohioans, including nearly 31,000 homeowners in Butler, Champaign, Clark, Greene, Hamilton, Miami, Montgomery, Preble and Warren counties, were eligible for the free review. Borrowers were asked to respond by filling out a form requesting their case be reviewed.

Monday’s deal involves 10 servicers: Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. That means meaning fewer people fall under the new agreement. Exact numbers were not available Monday.

Negotiations are ongoing with the other four servicers, government officials said.

Most of the affected borrowers in this part of the state reside in Montgomery and Hamilton counties, which were among the hardest hit in Ohio by foreclosures following the collapse of the real estate market.

Eligible borrowers could get $500 to $125,000 if their case shows mistakes or wrongdoing, according to information from government regulators. Wronged borrowers could receive a lump cash payment, as well as a correction to their credit report, payment for lost equity, reimbursements for related out-of-pocket costs and other remediation, according to government and consumer group officials.

The Federal Reserve said a payment agent will be appointed to administer payments on behalf of servicers. Questions about who the payment agent will be, how they will attempt to reach borrowers and how compensation will be issued could not be answered Monday.

“The concern seems to be that there’s a possibility that homeowners might have been entitled to ultimately more than what they will receive,” said Melodee Sheils, director of Consumer Credit Counseling Service of the Miami Valley, a local nonprofit finance and housing counseling agency.

The Independent Foreclosure Review had been criticized for not doing enough to reach borrowers. The deadline to submit a free request for a review was extended several times, most recently to Dec. 31. As of September, the response rate in Ohio was about 5 percent.

Nobody who submitted requests for review since 2011 received any remediation to date, according to government officials.

The eligibility requirements under Monday’s agreement is the same as it was with the previous review: homeowners must have been in the foreclosure process in 2009 or 2010 with one of the 10 participating mortgage servicers, but the foreclosure does not have to have been completed

Monday’s agreement “represents a significant change in direction” from the original 2011 agreements, Comptroller of the Currency Thomas Curry said in a statement. “It has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers,” Curry said.

Marcey Zwiebel, spokeswoman for PNC Financial Services Group, said, “We believe today’s agreement provides a benefit to eligible borrowers on a shorter timetable than the original review.”

This deal is separate from the record $25 billion National Mortgage Settlement reached almost a year ago under consumer protection laws.

The Associated Press contributed to this report.


Reader Comments ...


Next Up in News

Trump’s plan to neuter the White House press corps

Tyrants don’t allow open questioning, and they hate the free press. They want total control. That’s why, according to three senior officials on the transition team, the incoming Trump administration is considering evicting the White House press corps from the press room inside the White House and moving them — and news conferences...
Guide to our inauguration coverage
Guide to our inauguration coverage

The inauguration of Donald Trump as the 45th president is Friday and we have all of the angles covered for you to keep up with this event as it happens. Some of our team of reporters are already in Washington getting ready for this week’s events. Our team in D.C. includes: WHIO-TV reporter Jim Otte will be talking with elected officials and getting...
Dating website matches Trump supporters
Dating website matches Trump supporters

One California man wants to "make dating great again" with a Trump-themed dating website. Trump Singles is a not-quite-new, but suddenly ignore-at-your-own-peril dating site is aimed squarely at supporters of the president-elect. Founder David Goss launched the site in May 2016 for "like minded" people with the same political views...
Person drives $385K Ferrari off bridge in Austin, goes airborne for 40 feet, officials say
Person drives $385K Ferrari off bridge in Austin, goes airborne for 40 feet, officials say

A person who was charged with driving under the influence drove a $385,000 Ferrari off a bridge in Austin, Texas, went airborne for 40 feet and crashed into the woods while speeding on Friday night, Austin fire officials said Tuesday. >> Read more trending stories  The driver and two other occupants had only minor injuries, fire officials...
TV star Todd Chrisley’s daughter seriously injured in car accident
TV star Todd Chrisley’s daughter seriously injured in car accident

Get-well wishes are going out to Savannah Chrisley, daughter of Todd and Julie Chrisley from the USA series “Chrisley Knows Best.” Savannah Chrisley was driving in a rainstorm Monday night when she reached down to fix her floor mat. The floor mat became wedged under the gas pedal and her car veered into a guardrail as soon as she looked...
More Stories