Federal bank regulators have reached an agreement with 10 of the 14 banks conducting independent foreclosure reviews to provide quicker relief to borrowers harmed during the foreclosure process.
The 10 mortgage servicing banks have agreed to pay $3.3 billion in cash to eligible borrowers and $5.2 billion in other assistance—loan modifications or forgiveness of deficiency judgments.
Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo agreed to the $8.5 billion settlement with the Office of the Comptroller of the Currency and the Federal Reserve Board.
The independent foreclosure reviews identified nearly 500,000 borrowers that may have been financially harmed in 2009 and 2010 during the foreclosure process.
However, the case-by-case reviews were too time-consuming and costly. It will be “replaced with a broader framework allowing eligible borrowers to receive compensation significantly more quickly,” the regulators said.