The first wave of checks to 4.2 million borrowers, including hundreds of thousands in Florida, will go into the mail Friday, according to the Office of the Comptroller of the Currency and Board of Governors of the Federal Reserve System.
Tuesday’s announcement was the first time bank regulators released information on how the money, which is part of an agreement replacing the failed Independent Foreclosure Review, will be doled out. Everyone who was in foreclosure during 2009 or 2010 with loans serviced by 13 lenders named in the settlement is eligible for payments ranging from $300 to $125,000.
About 2.3 million borrowers will receive the minimum $300, but checks vary depending on borrower experience. For example, borrowers who had a home repossessed after successfully completing a trial loan modification could get $50,000.
The 1,135 borrowers receiving the maximum amount were mostly homeowners who went through foreclosure even though they were protected by the 2003 Service members Civil Relief Act. About 50 borrowers will get $125,000 each for losing their homes when their loan was not in default.
Critics of the program say the amounts were awarded haphazardly. In many cases, homeowners who applied through the original Independent Foreclosure Review received double the amount of money as people in the same situation who didn’t apply.
Also, up to $500 is being awarded to homeowners in a category called “modification request approved.“This is a completely nonsensical process,” said South Florida foreclosure defense attorney Roy Oppenheim. “It’s like winning the lottery.”