WASHINGTON – A new report says homeowners have received about $3.1 billion in cash under a federal settlement with 13 big banks over alleged misconduct in processing mortgages that may have resulted in wrongful foreclosures.
The report by the Federal Reserve released Monday says 83 per cent of the 4.2 million borrowers covered by the January 2013 settlement, or about 3.4 million, had cashed checks as of April 25. The amounts paid range from several hundred dollars to $125,000.
The banks are Aurora, Bank of America, Citigroup, Goldman Sachs, HSBC, JPMorgan, MetLife Bank, Morgan Stanley, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Wells Fargo.
The $9.3 billion settlement called for $3.6 billion in cash payments and $5.7 billion in aid such as reduced mortgage loans. The settlement ended a review of mortgage files required under a 2011 action by the Federal Reserve and the Office of the Comptroller of the Currency, a Treasury Department agency.
The Fed report said the affected homeowners received the money faster and the banks paid out more than would have been the case under the mandated review.
The report didn’t specify the total in aid to homeowners that the banks had provided as of April.