The Federal Reserve told borrowers whose mortgages were serviced by Morgan Stanley and Goldman Sachs would receive additional payments under the Independent Foreclosure Review payment agreement after they received less than the promised amount in the last payment.
Last year, the Federal Reserve and OCC reached a $3.6 billion deal with 13 mortgage servicers, including Aurora, Bank of America, Citigroup, Goldman Sachs, HSBC, JPMorgan Chase, MetLife, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo, over home foreclosures between 2009 and 2010.
The agreement provides cash payments to borrowers whose homes were in any stage of foreclosure and whose homes were serviced by any one of the banks.
Initial payments were issued last month, but the May 3 wave of payments received by some borrowers were less than the amount directed to be paid to the borrowers. Minneapolis-based Rust Consulting, the entity responsible for the check compensation, said the issue was the result of a “clerical error” that largely affects Goldman Sachs and Morgan Stanley borrowers.
Approximately 96,000 of the more than 217,000 Goldman Sachs and Morgan Stanley borrowers scheduled to receive payments on May 3 received an incorrect amount. The new checks will make up the difference between what was paid in the original check and what should have been paid.
More than 4 million borrowers are expected to qualify for compensation checks, with 2.4 million borrowers receiving payments of $300. Regulators have established 11 payment categories with the hopes of extending larger payments to homeowners who suffered greater harm.