The clock is now ticking for borrowers eligible for payment under the Independent Foreclosure Review Payment Agreements who have not yet cashed or deposited their check, and if they don’t act soon, their money is going to borrowers who already cashed their checks.
The Federal Reserve Board announced Thursday that borrowers who have not cashed their check have until Dec. 31, 2015 to request a replacement check.
Those borrowers then have until March 31, 2016 to cash their new checks.
If there are still any remaining funds left over after March 31, 2016, the Federal Reserve said that it will direct the paying agent, Rust Consulting, to redistribute the funds to borrowers who have already cashed their checks.
“The Federal Reserve intends to distribute the maximum amount of funds to borrowers affected by deficient servicing and foreclosure practices,” the Fed said in a statement.
According to the Fed, the Independent Foreclosure Review Payment Agreement, overseen by the Federal Reserve and the Office of the Comptroller of the Currency, provided $3.9 billion for borrowers of 13 servicers whose homes were in any stage of the foreclosure process in 2009 or 2010.
The affected borrowers’ mortgages were serviced by one of the following companies, their affiliates, or subsidiaries: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
According to the Fed, as of Oct. 2015, more than $3.5 billion in relief checks had been cashed or deposited by eligible borrowers.
Borrowers of servicers regulated by the Federal Reserve have cashed or deposited checks with a value of $798 million as of mid-October, the Fed said.
According to the Fed, that amounts to approximately 91% of the total value of the payments issued to these borrowers.
In February of this year, the Fed sent out checks to borrowers for the third time, noting that there were approximately 800,000 foreclosed homeowners who were still missing out on $500 million in compensation.
Now, the Fed is giving borrowers one last chance to claim their money. If they don’t, their money will soon belong to someone else.
[Correction: A previous version of this article incorrectly noted that the Office of the Comptroller of the Currency was involved in the distribution of this round of checks. The article is now correct.]