MINNEAPOLIS--(BUSINESS WIRE)--Rust Consulting, the paying agent for the Independent Foreclosure Review (IFR) Payment Agreement, said today that a clerical error led to some borrowers in the May 3, 2013, wave of payments being sent checks for less than the amount that the Federal Reserve directed those borrowers to be paid. Rust has corrected the error and plans to mail supplemental checks to affected borrowers as soon as May 17, 2013, for the additional amounts they were to be paid. A letter explaining the reason for the supplemental check will accompany the supplemental check.
In the wave of settlement payments mailed on May 3, 2013, approximately 96,000 borrowers whose loans were serviced by Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.) were affected by the error. The remaining borrowers mailed checks on May 3, 2013 were not affected by the error.
The correct total payment amounts are listed on the Federal Reserve Board’s website at http://www.federalreserve.gov/consumerinfo/files/bcreg20130429a1.pdf.
As of today, Rust has mailed payments to more than 3.9 million borrowers totaling approximately $3.4 billion. To date, 2.1 million borrowers have cashed settlement checks worth $1.9 billion. In all, 4.2 million borrowers will be paid from a $3.6 billion fund established by 13 mortgage-servicing companies.
Funds for payment were deposited in advance of the first wave of checks being mailed out.
Rust receives no benefit from uncashed checks or remaining funds in the IFR fund.
In January of 2013, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System reached an agreement with 13 mortgage servicers to conclude the Independent Foreclosure Review program. Under this agreement, the mortgage-servicing companies agreed to pay a combined $3.6 billion in cash payments to 4.2 million borrowers whose primary residence was affected by a foreclosure process in 2009 or 2010 by one of these servicers.
Rust Consulting was selected as Paying Agent to manage distribution of funds to borrowers. Rust sent postcards to the 4.2 million borrowers notifying them of their eligibility to receive payment under the agreement.
Borrowers who are eligible to receive a payment under the agreement and who have not yet received a check may receive a letter from Rust requesting additional information needed to process their payments.
ASSISTANCE FOR BORROWERS AND FINANCIAL INSTITUTIONS
To mitigate any issues and reduce opportunities for fraud, Rust printed a toll-free number on the back of the checks to help check-cashing stores and other financial institutions validate the checks. As of today, Rust has handled more than 100,000 calls to this number.
Borrowers with questions regarding their payment should contact the Paying Agent — Rust Consulting. Information provided to Rust will only be used for purposes relating to the agreement.
- Phone: 1-888-952-9105
- Monday through Friday from 8 a.m. to 10 p.m. ET
- Saturday from 8 a.m. to 5 p.m. ET