The clock is now at zero for the borrowers eligible for payment under the Independent Foreclosure Review Payment Agreements who have not yet cashed or deposited their check, and their money is going to the borrowers who already cashed their checks.
As it said it would last year, the Federal Reserve Board announced Monday that any leftover money from the $3.9 billion set aside for borrowers as part of the Independent Foreclosure Review will go to borrowers who already received money because some borrowers took too long to cash their checks.
The Fed said last year that borrowers who had not cashed their check had until Dec. 31, 2015 to request a replacement check. Those borrowers then had until March 31, 2016 to cash their new checks.
Now that March 31 has come and gone, there’s still more than $80 million left, and the Fed is directing the paying agent, Rust Consulting, to redistribute the funds to borrowers who cashed their checks by the March 31 deadline.
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.
In this disbursement, the servicers covered include GMAC Mortgage, Goldman Sachs/Litton Loan Servicing, Morgan Stanley/Saxon Mortgage Services, and SunTrust.
Additionally, some borrowers whose loans were serviced by HSBC or JPMorgan Chase may be covered, the Fed said.
Under the terms of the redistribution, every eligible loan will receive a payment of $124.30.
The Fed said that the disbursement effort is “consistent with the Federal Reserve's intention to distribute the maximum amount of funds to borrowers potentially affected by deficient servicing and foreclosure practices.”
According to the Fed, borrowers receiving a redistribution payment will have the opportunity to request a name on a payment to be changed, a payment to be split, or a payment to be reissued.
The Fed said that all requests must be received by Rust no later than Sept. 30, 2016.
Then, in early-November, there will be a one-time mailing of redistribution check reissuances to accommodate all reissue, payee change, and split check requests.
All redistribution checks will expire on Dec. 31, 2016, the Fed said.