Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of servicer error.
The agreements are similar to those announced on Jan. 7 between the Fed, the Office of the Comptroller of the Currency and 10 mortgage servicing companies — Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. The settlements end an independent review of mortgages that was required in 2011.
The latest agreement with Goldman Sachs and Morgan Stanley means more than 4 million borrowers will receive a total of $3.5 billion in cash compensation. Loan servicers will provide another $5.5 billion in mortgage assistance.
Banks, advocates and consumers have said that the individual loan review process is taking too long for homeowners to get compensated for the mistakes that, in many cases, led to the wrongful loss of their homes.