Foreclosure settlement checks hitting mailboxes

The first round of payments, totaling about $1.2 billion, will start getting sent out on Friday.

By Kim Peterson Apr 10, 2013 3:27PM
Image: Home Foreclosure (Dana Hoff/Getty Images/Getty Images)Some borrowers who entered foreclosure in 2009 and 2010 will start seeing checks soon as a result of the massive settlement brokered between banks and federal regulators.

The settlement basically ended the government's investigation into illegal bank foreclosures, sweeping under the rug a mess so complex and so badly handled that regulators essentially threw up their hands in frustration.

The first round of checks, averaging about $125,000 each, will go to the people perhaps treated the worst by banks. They include nearly 1,100 service members foreclosed on illegally, The New York Times reports, and 53 other borrowers who were hit with foreclosures even though they had never missed a mortgage payment.

But the vast majority of affected borrowers will get only about $300 each -- hardly enough to make up for the damage done after banks refused to work with them on loan modifications or other strategies to prevent foreclosures. Slightly more than 568,000 borrowers fall under this umbrella.

In all, the first round of payments is expected to total about $1.2 billion, but borrowers are ultimately going to see $3.6 billion in cash. The checks are part of a $9.3 billion settlement regulators agreed to in order to put to bed a sprawling and ultimately fruitless review of foreclosure injustices.

The whole thing was a dud, and people shared their disgust Wednesday on Twitter about a process that ended so badly. The check amounts "are really sad for those who lost their homes in error," wrote one Twitter user. Another was cynical: "Faced with IDing homeowners harmed by lender misconduct, regulators shrugged and sent everybody $300."

More on moneyNOW

Apr 10, 2013 5:28PM

We spent 2 1/2 years jumping threw the B of A hoops trying to get a loan modification. We must have submitted our paperwork 10 times yet the standard answer most of the time was "We didn't receive it" when we had the fax confirmation. Out of desperation and totally fed up we hired a firm to help with the modification. A huge $5,000 mistake but we were at our wits end with B of A. Nothing ever happened. We even connected with the President of Consumer Affairs office for B of A mortgage and were told if we made 6 months payments we would be granted a modification. HaHa. We borrowed from everywhere to make those 6 months payments and then were told by that office that we would need to reapply. That was it. We short saled the house and 3 weeks after it sold I was diagnosed with breast cancer. Of course we cannot prove that the stress of the 2 1/2 year battle was a contributing factor but we believe it to be. Both of us working full time and having to take so much time to put on the gloves with B of A sucked. We are in our 60's, not that age matters, it is a tragedy at any age.

It is a sad day when a settlement is reached and only because the government doesn't want to deal with it when they are the ones that created it in the first place with the ok of sub prime loans.

As taxpayers we actually pay these people to sweep problems under the rug. Are we angry, you damn betcha!

Apr 10, 2013 4:27PM
If the settlement total is 9.3 billion and the borrowers will only see 3.6 billion max, pray tell where the remaining 5.7 billion is going? The lawyers?
Apr 10, 2013 4:30PM

$300 Wont even pay for the time and paper work sent back to the banks over and over This Is what the taxpayer gets for bailing out Big Banks Screwed.

Apr 10, 2013 5:23PM
Lawyer's got rich.    People took it dry again.
Apr 10, 2013 4:52PM
for up rooting my kids take my home dealing with insane landlords killing my credit . i now drive a 16 yr old car taxes are a joke a kid in college i was two months behind and trying to pay up bac kept
sending the checks back. why? so 300.00for my over 100,000 dollar home  i guess we will go to dinner see a movie and buy groceries  what a joke!!!!lol

Chase closed on my home without a certificate of occupancy and was locked out for 9 months what f bank would fund a loan witout a co. now 7 yrs later and 140k in liitigation costs and not over yet I will get 300.00 we are all doomed. chase you suck....
Apr 10, 2013 5:59PM
I agree Bank of America was sending my payments back because they thought I missed 2. Only I am in the service and they bought my mortgage from my bank without me knowing it. It was my bank who messed up now I am facing foreclosure. Good thing we the tax payer bailed out Prank of America for 45 billion s they could stick it to us folks fighting a war. Thanks for the 300.00 for which I gave 24 years.
Apr 10, 2013 6:55PM
The next thing the regulators need to do is check into all the 1099's that were sent to these home owners for the so called losses the banks took for these loans. In particular the WAMU and Countrywide buy out by many of these banks sent 1099's to these foreclosed parties in the billions of dollars. Truth be known that these banks purchased these loans for as little as 13 cents on the dollar, and then turned around and sold these properties at auction or short sell for at least 2 to 4 times that amount, and still claimed the loss. There is still a lot to be told here and the IRS needs to be asking some questions. 
Apr 10, 2013 6:42PM

Average home owner spent well over $300 in faxing documents over and over and over! to home preservation specialists. Home owners pulled out cash from their IRA' s, 401K's, family loans to come up with 3 months trial periods over and over and over!! each time, the paper work gets lost and a new person gets appointed to your a/c. Some of these so called "preservation specialists " hardly know what's going on because they themselves have never owned a home or raised a family in this country before (not to mention their limited communication and math skills) dealing with distress home owners. During this whole time. the attorney's were running a huge "taxi meter" with thousands and thousands of dollars, and the banks will continue to accrue interest well above prime rates adding it back to the loan.  Thousands of hours on the phone, jacking up phone charges, and taking time off during and after work to call and call and call. to find out that person who worked with you is either on maternity leave or assigned to a different department, and no longer accessible. 


I guess the same specialists who were assigned to help home owners would have come up with the $ 300 settlement offer, makes sense now.        


Apr 10, 2013 6:09PM
How in the heck can these top CEO's at these corrupted banks look there selves in the mirror and not be ashamed of what they have done! Let alone the after effect of the damage they have caused our economy! People's dreams their lives they have been shattered over the corruption of greed and liars!         
Apr 10, 2013 6:54PM
Why is it that none of these crooks are going to jail for this.
Apr 10, 2013 3:49PM
Most of the checks are only $300.What can you do with that?
Apr 10, 2013 7:14PM
I can agree with almost every one  who posted here.Chase Bank has put the screws to so many people[not only Chase] After my Heart Attack I could not make my payments for three months  for my ss was not enough to pay my elect and water or food.I called Chase{regected}i wnet to their offices local.They tried{the were rejected}for three mounths I tried to get a mot.{rejectid}At end Bankruc.Lost all I had built to save my home for my family.Made all my payments thrru Brankup only to have Chase sell my account to a  company not in this world.More money.I am sorry for all the people who have been taken in by these banks and mort.companysI pray that you are strong and I know you will survie.I know I will I am 85 and they will not keep me down.Thank you
Apr 10, 2013 5:38PM
if you think thats bad just wait for obamacare to begin....

Apr 11, 2013 7:20PM
There's really almost no amount of money that's going to square up the mean-spirited and greedy screwing many borrowers got in the process of losing their homes to a system run amok.
$300 is an insult,  to say the least.

Apr 10, 2013 7:32PM
There will be no further investigation because it will start bringing to light the government's involvement in the whole mess.  Especially in forcing banks to loan to non qualified borrowers.  

Apr 10, 2013 7:16PM
The part that no one seems to talk about is the VA loans. Well I am going to talk about them and how the VA did nothing to help us. I had borrowed money for homes from the VA twice. Both times I had paid the loan in full. In August of 2008 when Bush said our economy was strong, the prices went down a bit and interest rates were reasonable, we bought a home through the VA. We had to pay a higher interest rate plus a seven thousand dollar fee for the VA "fund". The house was 237,000 dollars. We closed at the end of August. In six weeks the stock market collapsed, you know the rest even that part. In a few months I was laid off, no work as an electrician to be found in Sacramento, I though it would never happen especially there. Then my wife was laid off, she was a manager at a high end furniture store. No sales to speak of. We contacted the bank, the VA everyone we could think of,even some less than credible agencies. We sold our possessions, used our savings, believing help was on the way. It never came. We lost our credit, which was above 800, jobs, health care, savings, possessions, dignity and hope. Everything. The good on boys on Wall street they did and are still doing just fine. No one was ever even charged with doing anything wrong. The VA told us because the price of house dropped so much from 237,000 to 140,000 we had lost our entitlement. Even though a loss like this was unprecedented. The VA did absolutely nothing to help us. The banks did nothing either. So now we get $300.00. That should be about right. We figure we lost about 40,000 thousand. Plus credit. Again the rats win. I contacted the VA recently. Since we have it all behind us I wanted to try to buy a low cost house. They told me I was approved for up to 144,000K. But I can only afford 90,000K. I can not borrow the 90.000K I need and want. To get a loan I must take the 144,000K eventhough  I can not afford to pay back. That is how this all started, what do they call it, oh yes, insantity,This is all completely true. The VA says there is nothing they can do. I don't know why, it is there program.. I have talked at least ten VA representives. They don't care. Don't believe the VA is going to be there for you. They are part of the big money good old boy bunch. All you have to do is follow the money>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Stephen Yost
Apr 11, 2013 11:52AM
Apr 11, 2013 6:28PM
It's a cop-out. Just so the federal regulators don't have to do their jobs and actually compensate those people properly! It is really disgusting that banks can, and do these things all the time. They aren't even being punished. They will continue to do this over and over. I do not, for that reason, have my money in a big bank. I use my credit union. I will not give big banks any business if possible, and that includes refinancing. I really feel bad for those poor people that lost their homes.
Apr 10, 2013 6:03PM
We will also get taxed 30% on the check I moving to North Korea
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