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Michigan Credit Union League

Mortgage Servicing Companies Agree to Pay $8.5 Billion to Help Homeowners

Ten mortgage servicing companies who were already subject to enforcement actions ordered in a consent agreement in April 2011 (list below) have agreed in principal with the Office of the Comptroller of the Currency and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help homeowners.

  • $3.3 billion in cash payments of up to $125,000 to homeowners and
  • $5.2 million in other assistance such as loan modifications and forgiveness of deficiency judgments.

The Michigan Foreclosure Task Force said this settlement effectively replaces the flawed and ineffective Independent Foreclosure Review that was part of the consent agreement. Although details are still sparse, the press release indicates that eligible borrowers will be contacted by payment agents by the end of March and need not take any action. The release also indicated that the agencies continue to work to reach similar agreements in principle with other servicers that are not part of the settlement reached today.

Servicers named in the settlement include Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.

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