Isn’t America great?
First, the feds bailed out the too-big-to-fail financial institutions on Wall Street. Today, Uncle Sam announced they’re bailing out the too-helpless-to-know-better borrowers on Main Street.
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve announced today that as many as 200,000 borrowers will be paid between $500 to $125,000 (plus equity) for erroneous foreclosure actions. U.S. banks, including JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and others, will pay borrowers harmed by mishandled foreclosure in 2009 and 2010.
Since the big banks got $700 billion in TARP money, they already are flush with cash courtesy of former Treasury secretary Hank Paulson. So a couple of billion here and there to make some pesky foreclosed borrower go away is no big deal for the bankers.
Besides lump-sum payments, banks who improperly handled foreclosures may have to rescind them, modify loans or correct credit reports, according to guidelines issued today by OCC and the Federal Reserve.
Earlier this year, the government had sent out 4.4 million letters informing foreclosed borrowers they could ask for reviews of their foreclosure file. Of those, 4.4 percent, or about 194,000, had done so by the end of May, the OCC reported.
For foreclosed borrowers who want to apply for a foreclosure review, click here. But hurry the Main Street foreclosure bailout deadline is September 30, 2012.
Readers what do you think? Should Uncle Sam be bailing out foreclosed borrowers to the tone of $125,000 for each borrower?
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