We first talked about the US “robo-signing crisis” in 2010 (see here).Untrained workers were signing thousands of mortgage foreclosure docunments without proper supervision.
The US Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board have now announced that 10 mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the OCC and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.
The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision.
Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.
