More than 7,000 Utahns who were foreclosed on by some of the nation's largest banks between 2008 and 2011 will receive checks for approximately $1,480 each this week, according to the office of embattled Utah Attorney General John Swallow.
The checks are part of the National Mortgage Settlement that former Attorney General Mark Shurtleff and attorneys general from 48 other states and the District of Columbia signed on to in February 2012. The settlement was an agreement with the country's five largest mortgage servicers — Ally (formerly GMAC), Bank of America, Citibank, JPMorgan Chase and Wells Fargo — regarding their practices in handling foreclosures.
One of the major issues the settlement addressed was the banks' practice of "robo-signing" documents. In the foreclosure process, rather than reviewing the details of each individual case, these "robo-signers" would assume the paperwork was correct and sign it automatically — regardless of its contents.
Under the terms of the settlement, the banks must pay a total of $25 billion to states, the federal government and individuals, and follow more rigorous standards in their review processes. Last month, New York Attorney General Eric Schneiderman said he planned to sue Bank of America and Wells Fargo for violating the standards set forth in the settlement, according to Reuters.
The checks to individuals under the settlement will be disbursed from the settlement administrator, Rust Consulting, from June 10 through June 17. Recipients had to submit a claim to receive payment from the settlement, and the deadline to file a claim has passed.
A total of $10,496,333 will be distributed to 7,379 Utahns from the $1.5 billion settlement. The settlement does not prevent a borrower from seeking additional relief through a separate lawsuit or other claims, according to Swallow.
“These payments hold the banks accountable and the settlement puts a stop to some of the mortgage servicing abuse we’ve seen in the past,” Swallow said in a press release.