What is an Independent Foreclosure Review?
As you may recall, the Independent Foreclosure Review is part of the settlement associated with the robo-signing debacle of 2010 (title my own). As part of this review, thirteen mortgage servicers and their affiliates identified customers who were part of a potentially mismanaged foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.
These 13 mortgage servicers sent solicitation letters to 4.2 million potential victims of robo-signing and other foreclosure-related (and potentially fraudulent) matters. These letters provided homeowners the opportunity to request an independent review of their foreclosure process (a.k.a. Independent Foreclosure Review). If the review found that financial injury occurred as a result of errors, misrepresentations, or other deficiencies in the servicer’s foreclosure process, the customer might receive compensation or another remedy.
Beginning in April of this year and continuing through the end of July, Rust Consulting, the independent settlement or paying agent, has mailed out hundreds of thousands of settlement checks.
Who Pays Rust Consulting?
According to the OCC, the thirteen banks that agreed to participate in the Independent Foreclosure Review and settlement are responsible for paying Rust Consulting, the settlement agent. These banks include Bank of America, Citigroup, J.P. Morgan Chase, and Wells Fargo among others.
In an article written by Alan Zibel and Andrew R. Johnson of The Wall Street Journal, the journalists point out that Rust Consulting was owned by SourceHOV until March of this year. At that time, ownership changed, and Rust Consulting is now owned by Citi Venture Capital International, a unit of Citigroup.
Conflict of Interest for Citigroup
Many have complained that the entire settlement plan involved a conflict of interest since the very banks involved in the settlement were responsible for payment to the settlement agent.
However, the fact that Rust Consulting makes money administering a settlement that involves Citigroup has many folks screaming foul. Rust’s practices have been questioned before. Over 100,000 consumers were reportedly sent checks for less than the amount owed. Many checks were returned as undeliverable. And, in late July, 400,000 checks were sent out, but many were returned as undeliverable (some of which are worth up to $125,000).
If you or anyone you know is expecting an Independent Foreclosure Review settlement check, you can contact Rust Consulting at 1-888-952-9105.
