WASHINGTON (4/18/13)--The Office of the Comptroller of the Currency (OCC) issued a news release reminding financial institutions that a first "wave" of 1.4 million checks was sent to consumers on April 12 as part of the expected $3.6 billion in payments under the Independent Foreclosure Review process.
Nearly 50,000 checks totaling nearly $50 million relating to the IFR payments had been cashed or deposited as of close of business on April 15, the agency release said.
The payments are part of agreements between federal regulators and servicers to provide $3.6 billion in cash payments to borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010 and whose 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.
More than 90% of the total payments to borrowers at those servicers are expected to be sent by the end of April, the OCC said, adding that the final wave of checks is expected to go out in mid-July.
A recent U.S. Government Accountability Office (GAO) report said that complexity, overly broad guidance, and limited monitoring for consistency hampered the progress of bank regulators' IFR program.
The IFR process started in 2011 as part of consent orders issued against 14 top mortgage servicers. The foreclosure review process was meant to provide foreclosed borrowers with an opportunity to have their cases reviewed for errors and misrepresentations on the part of servicers. Restitution was also a possibility for some foreclosed borrowers.
The OCC and the Federal Reserve Board on Jan. 7 announced that the IFR process would instead be replaced with a settlement, which the OCC said in a release at the time would allow all IFR-eligible borrowers "to receive compensation significantly more quickly."