US banks to send checks to 4.2M who lost homes

[Evo]

Finally, something being done for homeowners that lost their homes without proper evaluation.

The nation's largest banks will begin sending payments this week to millions of Americans who may have been wrongfully foreclosed on during the housing crisis.

A total of $3.6 billion in cash will be distributed to 4.2 million borrowers, the Federal Reserve and the U.S. Comptroller of the Currency said Tuesday. Payments will range from $300 to $125,000. About 90 percent of borrowers whose mortgages were serviced by 11 of the banks will receive payments by the end of April, the agencies said.

http://news.yahoo.com/us-banks-send-checks-4-153752525.html

 

[Greg Bernhardt]

Amazing the banks did this! Did they need a quick injection of cash? Why would they want to put homes into foreclosure? I thought no one but investors won with them.

 

[edward]

The banks have been dancing around this issue since 2009. The total payout seems to have dropped since January.

Banks’ $8.5 Billion Deal Kills Review That Never Saw Results

http://www.bloomberg.com/news/2013-...5-billion-to-settle-foreclosure-missteps.html

 

[Vanadium 50]

Amazing the banks did this! Did they need a quick injection of cash? Why would they want to put homes into foreclosure? I thought no one but investors won with them.

Foreclosure is legally difficult (and is becoming more so). Certain things have to happen at certain times, or the whole process resets. The banks knew that they would have to foreclose on some fraction of the loans, but were not so sure of which exact loans. Hence the robo-signing, to keep their options open on as many loans as they could. Which is illegal.

 

[edward]

The who owns what home fiasco began with Mortgage Electronic Registration System

The real estate law and real estate transactions in the US are subject to state regulations and county level recordation requirements, since the time of the establishment of the US as an independent country.[2] That made it quite cumbersome for financial companies to develop a smooth operation of a market based on US mortgages in the early 1980s.[3] This is because every time a financial instrument containing mortgages is sold, various state laws may require that the sale of each such mortgage (or deed of trust) be recorded in the local county courts in order to preserve certain rights (e.g., the right to foreclose non-judicially), which triggers an obligation to pay corresponding recording fees.[4] So, the financial industry, eager to trade in mortgage-backed securities, needed to find a way around these recordation requirements, and this is how MERS was born to replace public recordation with a private one.[5] By 2007, MERS registered some two-thirds of all the home loans in the US.

Bold mine:

http://en.wikipedia.org/wiki/Mortgage_Electronic_Registration_Systems

Our local county Recorders office still has a lot of homes showing Mortgage Electronic Registration Systems as the owner.

The County Assessors Office on the other hand always had the correct name of the owner for tax purposes.

Somehow the big banks couldn't figure out how to find the correct owner even though most of this information was available online.

I personally suspect that when large numbers of mortgages were sold to investment banks to be bundled they used their own numbering system to identify the mortgage information. The complete owner information was left behind in a computer in the back of a warehouse building somewhere.

And this was complicated by the fact that the original brokers and MERS, who had or once had, the information no longer had any skin in the game.

 

[jac0b 740m920n]

this is great I've heard about people who have wrongfully lost their homes while having a whole family to take care of i can't even imagine good job banks