ResCap to Pay $230M to End Foreclosure Reviews

June 27, 2013
American Banker  
mortgage lending news

A bankruptcy judge has sanctioned termination of foreclosure reviews at Residential Capital, which instead will earmark $230 million to compensate homeowners whose properties were seized improperly. The deal between the subprime mortgage lender and the Federal Reserve adds ResCap to a pool of 10 other loan servicers that earlier this year agreed to pay $8.5 billion total to halt regulatory review of their foreclosure practices. The other firms -- JPMorgan Chase and Bank of America, among them -- agreed to pay $3.3 billion as well as provide $5.2 billion in mortgage modifications and other aid to nearly 4 million borrowers who lost their homes to foreclosure in 2009 and 2010.
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