Homeowners to Collect Up to $125,000 as Compensation for Foreclosure Processing Abuses

Homeowners who were victims of foreclosure processing abuses could each receive up to $125,000 from mortgage lenders, this according to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve.

The OCC and the Federal Reserve are the two government agencies that oversee the Independent Foreclosure Review. This foreclosure review is different from the National Mortgage Settlement, whereby 49 state general attorneys and five biggest mortgage lenders (Bank of America, Citibank, JPMorgan Chase, Wells Fargo and Ally Financial) settled for $26 billion over the issue of foreclosure processing abuses.

“Borrowers will not be disqualified from the Independent Foreclosure Review if they also participate in the National Mortgage Settlement,” the OCC and the Federal Reserve clarified in the Financial Remediation Frequently Asked Questions.

Last June 21, the OCC and the Federal Reserve announced the guidelines for homeowners to receive compensation for foreclosure processing abuses. The agencies announced that qualified homeowners have up to September 30, 2012 to request a free review of their mortgage foreclosures under the Independent Foreclosure Review.

“Under the guidance, remediation for injuries (as a result of errors in foreclosure actions on their homes) may include lump-sum payments, suspension or rescission of a foreclosure, a loan modification or other loss mitigation assistance, correction of credit reports, or correction of deficiency amounts and records. Lump sum payments can range from $500 to, in the most egregious cases, $125,000 plus equity,” the OCC and the Federal Reserve said in a joint statement.

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