In a report issued Monday, the Federal Reserve Board defended its method of punishing banks for misconduct in home foreclosures. The agency said about 83 percent of borrowers have cashed checks reimbursing them for financial injury.
In 2011 and 2012 settlements,16 mortgage servicers entered into payment agreements with the Office of the Comptroller of the Currency, Federal Reserve, and Office of Thrift Supervision to provide $3.9 billion in direct cash payments to borrowers and about $6.1 billion in foreclosure prevention assistance. The funds were to be administered under a program called Independent Foreclosure Review.
In January 2013, with less than 20 percent of the more than 500,000 review requests completed, 13 mortgage servicers reached an agreement with federal bank regulators that ended the Independent Foreclosure Review for those servicers participating in the settlement.