independent foreclosure review check

How much will your independent foreclosure review check be?

April 16, 2013
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independent foreclosure rev How much will your independent foreclosure review check be?

About the Independent Foreclosure Review Settlement

Just about a month ago, 4.2 million formerly distressed borrowers received small postcards in the mail stating that their settlement check would be coming soon. That’s the settlement coming from the Attorney General (by means of its paying agent, Rust Consulting) as part of the Independent Foreclosure Review.

Postcards from Rust Consulting have created a national frenzy as 4.2 million borrowers clamor to find out when they will be getting their checks and how much they will receive. Just last week, the breakdown information became available, and it appears that approximately 2.4 million formerly distressed borrowers will probably not be able to buy more than a steak dinner with their new found fortune.

What Is Independent Foreclosure Review?

In April of 2011, the Federal Reserve Board issued enforcement actions against four large mortgage servicers (GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, and EMC Mortgage Corporation). Because of this, these four servicers were required to hire independent consultants to review foreclosures that were initiated, pending, or completed during 2009 or 2010. The reason for this review was to determine whether borrowers suffered any financial harm directly resulting from errors, misrepresentations, or other anomalies that may have occurred during the foreclosure process. In addition to these four servicers, a number of other servicers supervised by the Office of the Comptroller of the Currency (OCC) were also required to conduct independent reviews.



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In order to initiate the review process, a total of 13 mortgage servicers sent solicitation letters to 4.2 million potential victims of robo-signing and other foreclosure-related (and potentially fraudulent) matters. These letters provided homeowners with the opportunity to request an independent review of their foreclosure process (a.k.a. Independent Foreclosure Review). If the review found that financial injury occurred as a result of errors, misrepresentations, or other deficiencies in the servicer’s foreclosure process, the customer might receive compensation or another remedy.

The deadline to request the independent review was December 31, 2012.

Payments to Eligible Borrowers Began April 12, 2013

According to information available on both the Federal Reserve Board and the Office of the Comptroller of Currency websites, some payments went out in the mail as early as April 12, 2013.

In an announcement on the OCC website that came on April 9, 2013, the following disbursement information is provided:

Checks will be sent in several waves beginning with 1.4 million checks on April 12. The final wave is expected in mid-July 2013. More than 90 percent of the total payments to borrowers at those 11 servicers are expected to have been sent by the end of April. Information about payments to borrowers whose mortgages were serviced by Morgan Stanley and Goldman Sachs will be published by the Federal Reserve Board soon.

In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent—Rust Consulting, Inc.  Some borrowers may receive letters from Rust requesting additional information needed to process their payments.

How Much Will Your Independent Foreclosure Review Check Be?

Borrowers will receive anywhere from $300 all the way up to $125,000 depending upon their perceived financial harm by the events surrounding their foreclosure activity. The Independent Foreclosure Review Disbursement Breakdown shows that 2.4 million borrowers will receive $300 and approximately 1300 borrowers will receive $125,000—the bulk of borrowers will receive $500 to $600 dollars.

How Were the Disbursements Determined?

The Independent Foreclosure Review Disbursement Breakdown has the lists of categories used to determine the remuneration. The categories vary greatly and include wrongdoing to servicemembers, wrongful foreclosures on borrowers not even in default, foreclosures during a forbearance period, and even successful completion of a loan modifications.

There seems to be a great deal of concern, and perhaps confusion, with respect to how the disbursement funds has been allocated. As pointed out by Paul Kiel of ProPublica, it’s a little hard to understand the differences in rationale between some of the payment types. The categories are broken down into types of servicer error and some servicer errors are more grievous than others. For example, if a borrower is denied a loan modification and lost his or her home to foreclosure (about 370,000 borrowers), this individual will receive $3,000 or $6,000, depending upon whether the borrower submitted a complaint. On the other hand, if a borrower applied for a modification, and the servicer made no decision and then foreclosed (about 196,000 borrowers), the payment would be between $400 and $800.

4.2 million wronged borrowers may be hoping for $125,000, yet it seems that borrowers waiting for disbursement checks better hope that they were victims of the “right” servicer error. Very few folks will be able to hang their hat on the opportunity to buy a new home with their Independent Foreclosure Review check.

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


  • Andrita Sanford

    This is disgraceful. People lost their homes and had to uproot their families yet all they will receive is a $300! The banks shady practices haven’t hurt them as much as it has destroyed once thriving neighborhooods & communities. If they really want to help people, they should remove ALL negative mortgage debts from the credit reports of those that were affected by this act of corruption.

  • xxcb2235

    300.00 really???? I was denied 3 for a loan modification and ended up losing my house and having to uproot my family…… 300.00 is a slap in the face, just keep it and and stop insulting me

    • camy sandoval

      i agree with you , i feel the same. i lost my house, i was suffering for depression for one year, i lost my marriage and i receive 300.00 this is bull sheet. i am sorry ,i am so angry

  • http://www.facebook.com/jill.watson.94 Jill Watson

    Why are service members given the full settlement amount? Why are those that filed a complaint for review given double the amount? Most of us had the same problem and should be resolved in the same manner. Screwed again by the banks and government.

  • http://www.facebook.com/christina.haines.7777 Christina Haines

    Hey I received a letter from Rust Consulting stating I would NOT receive any compensation. ACCORDING to BANK OF AMERICA, They DID NOT service my mortgage loan during the reveiw period of Jan-2009 to Dec-2010.

    Hhhhhmmmmmm … I moved out of my home in February 2011… I’m looking at my payment stub date June 2009. This is what happens when LAZY PAPER PUSHERS get involve. I called the # listed on the letter.

    The man I talked too told me I have NO recourse after the review period was over. He put me on hold several time, after I asked him a question. When he got back on the phone, It sound like her was reading a script from a website. I asked if was reading to me. He said YES, we were given these scripts to ensure we are giving the correct information in response to letters that was mailed out. He sound like he was on Heron… a Dragging scratchy voice. He wasn’t hearing any thing I said about the letter. I asked to speak to a Supervisor. I was given a P. O. Box address to send a letter for reconsidation. I can’t wait to hear what response I will receive. This is the 2nd time I’ve got the run around from B of A. I was suppose to receive compensation from the HAFA Program to relocate. That never happened !!!! God Bless to all who has to deal with the Banks in regards to saving their homes or relocating their Families…. May God be with you ! ! !

  • camy sandoval

    Really!! this my be a joke!! I lost my house, and i receive $300,00. this is bull -sheet , I wonder if now the ” Independent foreclosure reviewers are not taking advantage of this… Behind of the check it said ones is cash out you can’t complain, or fill out any other review. this sucks. how should i know if the 300,00 is what i got it? and why is too low? they don’t said anything .

  • Tracy
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  • Jessica

    The way these servicers placed us in categories were drawn from a bucket. There was no rhyme or reason.

    Their overpaid hired consultants couldn’t tell us if the applicants were financially harmed in the two years of reviewing 100,000 cases, yet in 5 weeks they determined categories for 4.2 million files?! This entire “review” is a disgrace.

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  • http://www.facebook.com/matt.day.33483 Matt Day

    the mortage companys made way more money than they are paying out nothing new they do things that are against the law and then pay fines that are way less than they made the only lesson here is why not steal from the public this didnt hurt them at all but destroyed our lives

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