More than 232,000 borrowers whose homes were in any stage of foreclosure in 2009 and 2010 with GMAC Mortgage will now receive cash compensation under the Independent Foreclosure Review agreement.
GMAC Mortgage is required to make approximately $230 million in cash payments to borrowers, the Federal Reserve said Friday.
GMAC now becomes the 14th major mortgage servicer under the agreement that ended costly but mostly fruitless foreclosure reviews in favor of $3.8 billion in payouts to about 4.4 million borrowers. Ranging from $300 to $125,000, the payouts are suppose to compensate victims for botched mortgage modifications, erroneous documentation or wrongful evictions. The vast majority of recipients qualify for a few hundred dollars.
The bankruptcy court that is overseeing proceedings involving GMAC Mortgage approved GMAC’s entry into the IFR settlement Friday. As a result of this amendment, the independent foreclosure reviews will conclude for GMAC Mortgage borrowers, regulators say.
“Information about payments to borrowers whose mortgages were serviced by GMAC Mortgage will be announced in the near future,” the Federal Reserve said.
GMAC Mortgage is a unit of Residential Capital LLC (ResCap), which owned most of the mortgage business of U.S. auto lender Ally Financial. ResCap filed for bankruptcy last year.
As is the case with the other 13 mortgage servicers in the IFR agreement, borrowers whose mortgages were serviced by GMAC Mortgage who accept a payment will not be prevented from taking any action related to their foreclosure.
The Fed said borrowers with all 14 servicers can call 1-888-952-9105 to update their contact information, verify that they are covered by the agreement, or to ask further questions.