DENVER -- More than 220,000 people who had their homes foreclosed on will be receiving settlement checks in the coming weeks, all resulting from an investigation into shady mortgage practices.
The investigation looked into cases of homes in foreclosure in 2009 and 2010, and involved 13 major lenders including Aurora, Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
The cases also include former subsidiaries Saxon Mortgage Services, Inc. and Litton Loan Servicing LP.
In January, federal regulators reached an agreement with the lenders to pay 4.2 million borrowers $3.6 billion in cash payments. Checks have been trickling out since April 12 with payments ranging from $300 to $125,000.
The settlement stems from what the so-called ‘robo-signing’ of loan documents for people who should never have been approved.
Homeowner advocate Julie Maeda says before the housing crisis, “If you had a pulse, you were able to get a loan.” Maeda also says robo-signing was often done by bank or lender employees who were not qualified to approve loans.
Aaron Meier is one homeowner who has been fighting to keep his home after he says he was baited into modifying his loan.
He said his bank told him to make late payments on his loan, and start making trial payments, but after eight months the bank still foreclosed. “They said… ‘You don’t qualify… You don’t make enough money.’”
Meier says he was hoping for a settlement check of at least $50,000, but was only offered $2,000.
Maeda says banks have been toying with homeowners for years, giving them false hope about staying in their home until it’s too late.
She also says, “Many of the banks will not give a homeowner a modification unless they are behind on payments. They will come and say to their customer, ‘we won’t help you unless you’re behind.’”
Maeda says that’s simply not true, and in many cases it just leads to more foreclosures.
For more information: Julie Maeda --The Haven Team –720-295-4673
For questions about settlements: Rust Consulting 1-888-952-9105