Borrowers who experienced foreclosure in 2009 and 2010 each will receive checks ranging from $300 to $125,000 under the national settlement between top banks and federal regulators reached in January, Reuters reported April 9. Most payments will range from $300 to $600.
The checks started mailing April 12.
Thirteen mortgage servicers were involved in the settlement, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. The banks mailed a total $3.6 billion in cash payments to borrowers who were in any state of foreclosure at the height of the housing crisis, Reuters reported.
The settlement was designed to put an end to case-by-case reviews of past foreclosures due to the excess of time and expense involved. By the time of the settlement, banks already had paid out $2 billion to consultants conducting independent foreclosure reviews.
Reuters noted that 1,082 active-duty military borrowers each will receive $125,000 as a result of the settlement, and about 40 borrowers who were not in default but whose homes were seized anyway also will receive that top payout amount.
Some 3 million borrowers will receive payments in the $300 to $600 range. A total of 4.2 million borrowers are eligible for the payments. Reuters reported that these numbers do not include borrowers whose mortgages were serviced by units of Morgan Stanley or Goldman Sachs.