Rust Consulting has mailed more than $3.4 billion worth of checks related to the Independent Foreclosure Review since April 12, with the bulk of that amount sent out by April 26.
More than 2.4 million IFR checks have been cashed or deposited for nearly $2.2 billion through May 16, 2013, according to new data Friday from bank regulators.
A final wave of checks that required additional information from borrowers will be issued “during the summer.” Rust Consulting nor regulators can provide a specific date. The total compensation amount is $3.6 billion, leaving $200 million worth of checks to send out.
So why hasn’t $1.2 billion in checks already mailed been cashed or deposited?
Some of that amount belongs to 96,000 settlement recipients whose checks mailed on May 3 were short of the proper amount. Checks making up the difference were scheduled to be sent out Friday.
However, checks worth a total of $3.2 billion had already been sent by April 26 — three weeks ago.
Some recipients will have issues with the names on the check being wrong, or the checks being sent to previous or wrong addresses. Other recipients have likely not cashed or deposited their checks, the vast majority of which are for a few hundred dollars.
Bank regulators say recipients have to cash or deposit their check within 90 days of the date it is issued, or the check will be void.
How many checks were sent to wrong addresses has yet to be determined.
Regulators say that receiving a payment under the IFR agreement will not affect any other actions borrowers are taking with their mortgage servicer, including efforts to prevent a foreclosure sale or to secure a mortgage modification.
“Regulators will determine what will be done with payments that are not cashed or deposited,” says the IFR official website. “We do not have any additional details at this time on what will happen with those funds.”
IFR administrators say that if you did not get a check and you are eligible for compensation, you can call Rust Consulting, the payments administrator, at 1-888-952-9105 — Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET — to verify if you are eligible to receive a payment.
(Keep in mind, Rust Consulting is also handling $1.5 billion in payouts from a separate agreement to settle foreclosure abuses known as the National Mortgage Settlement. Those checks will be sent out “mid-2013″ — with Rust unable to provide a more specific timetable, despite repeated attempts by eligible borrowers to get answers from Rust executives over the past few weeks.)
Here are a few questions and answers from bank regulators related to problems that may affect getting or depositing the IFR checks.
I LOST, MISPLACED OR DESTROYED MY CHECK. HOW CAN I HAVE MY CHECK REISSUED/GET A NEW CHECK SENT TO ME?
The reissue process requires that you submit a written request for reissuance. Please call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET to request a form for reissuance of the check.
I CHANGED MY NAME, HOW CAN I UPDATE THAT ON THE CHECK?
Checks are issued to the name or names we have on record. Once you receive the check, if you are unable to negotiate it with your bank, we will have a process established to request a form for reissuance of the check. Please call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET to request a form for reissuance of the check.
THE PERSON LISTED ON THE CHECK IS DECEASED. HOW CAN I HAVE A CHECK REISSUED TO ME AS THE BENEFICIARY/EXECUTOR/POWER OF ATTORNEY/ETC.?
The reissue process requires that you provide documentation regarding the deceased borrower’s estate and that you are a beneficiary. Please call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET to request a form for reissuance of the check.
WE’RE DIVORCED, WHO GETS THE CHECK? WHAT ADDRESS DO YOU USE?
All borrowers on the loan will be listed on the check. We will mail the check to the address in our files as of March 1, 2013.
WE’RE DIVORCED OR SEPARATED; CAN WE GET SEPARATE CHECKS?
No, only one check will be issued per loan. The check was issued to all borrowers named on the loan and all borrowers must sign the check to cash or deposit it.
HOW WILL CASHING THIS PAYMENT AFFECT MY TAX REPORTING?
Cashing or depositing the check may affect your taxes. We cannot advise you on your tax liability, if applicable. The letter you receive with your check should indicate the amount which may be reportable as income to the IRS and State Tax Authorities. Tax Forms will be sent in January of next year. You can go to http://www.independentforeclosurereview.com/taxinfo and review the Statement to Eligible Borrowers for some additional tax information.
WHAT HAPPENS IF I DON’T CASH THE CHECK?
You are under no obligation to cash the payment. The federal banking regulators will determine what will be done with payments that are not cashed or deposited. We do not have any additional details at this time on what will happen with those funds.
IF I DON’T CASH THE CHECK, CAN IT STILL AFFECT MY DISABILITY/OTHER BENEFITS?
Cashing or depositing the check may affect your disability or other benefits. If you have questions, we suggest you consult the organization from which you receive benefits for further information.
DID YOU SEND ME A 1099 FORM WITH THIS CHECK? WILL YOU SEND ME A 1099 FORM?
Tax documents, such as 1099s or 1098s or other applicable forms will be mailed to borrowers in January of 2014. Also, please review the Statement to Eligible Borrowers that is linked on the website, http://www.independentforeclosurereview.com/taxinfo and consult a tax advisor to determine the potential tax consequences and appropriate tax treatment for your individual situation.
All Q&As related to the Independent Foreclosure Review can be found here.