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 who lost their homes or were at risk of foreclosure, the Federal Reserve and the U.S. Comptroller of the Currency said yesterday. 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.
The last group of payments is expected in mid-July.
The banks, which include Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, reached a settlement with the federal agencies in January. They agreed to pay a total $9.3 billion in cash and in reductions of mortgage balances.
The 13 banks settled the regulators' complaints that they wrongfully foreclosed on borrowers with abuses such as "robo-signing," or automatically signing off on foreclosures without properly reviewing documents.