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April 10, 2013

Most Borrowers to Receive Paltry Sum from Banks in Foreclosure Settlement 
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Federal regulators have disclosed the terms of a major settlement with
the nation's top banks for the wrongful foreclosures on the homes of
millions of Americans. Around $3.6 billion will be shared among some
four million borrowers potentially affected by the banks' misdeeds.
About 80 percent of borrowers will receive token amounts of
compensation, with payments as low as $300. According to regulators, at
least 53 borrowers lost their homes even though they had not actually
defaulted on their loans. More than 1,000 members of the military were
also wrongfully foreclosed. Those borrowers will receive payments of
$125,000. The settlement includes no admission of wrongdoing by any of
the banks involved. Federal regulators shut down a review of the banks'
practices in order to reach the settlement earlier this year. Recent
government figures show wrongful foreclosures were far more widespread
than regulators acknowledged, occurring at a rate of nearly one in
three.

 

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