Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Housing News

Foreclosure settlement check drama: bad for Citigroup

As a result of the Independent Foreclosure Reviews, checks are in the mail for wronged homeowners, but a major conflict of interest at Citigroup has come up that has gone mostly unnoticed.

check writing

citigroup conflict

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.

Advertisement. Scroll to continue reading.

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.

Advertisement. Scroll to continue reading.
Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business News

(Business News) That Citibank around the corner of you will be shutting down or going commercial only, so if your cash is there, it's...

Housing News

(Housing News) Many homeowners are receiving 1099-MISC tax forms stating that they got a check from Rust Consulting for being wrongfully foreclosed upon, yet...

Housing News

Rust Consulting is sending out official looking mailers promising formerly distressed borrowers that a check is in the mail - and it's not a...

Business Finance

In a shocking, confusing move, the top two executives at Citigroup, one of the largest financial institutions in the nation, have jumped ship without...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.