We have covered extensively the large mortgage fraud settlements brokered by the federal government under which major mortgage servicers were, among other things, supposed to pay money directly to consumers harmed in the mortgage meltdown. Go, for instance, here, here, here, and here.
Now, Danielle Douglas, reports that it's taking a long time for the money to be paid out. Here's an excerpt:
Banks have paid less than half the $5.7 billion in cash owed to troubled
homeowners under nearly 30 settlements brokered by the government since
2008, delaying help to the millions of victims of discrimination and
shoddy lending that epitomized the housing crisis, according to a
Washington Post analysis of government data. When the settlements were announced, with great fanfare, government
officials hailed them as the long-promised reckoning with the financial
industry. Regulators found that some banks had saddled borrowers with
unaffordable mortgages or assigned higher rates to minorities even when
they qualified for a better deal. Some banks were accused of having
employees “robo-sign” foreclosure documents without reading them or
having proper documentation. … In 2011, Wells Fargo agreed to compensate up to 10,000 borrowers after
the Federal Reserve found the bank was steering them into subprime loans
even though they qualified for better mortgages. But no borrowers have
received money yet. Last year, Bank of America agreed to pay some borrowers between $1,000
and $5,000 for what the Justice Department called lending
discrimination. The agency said the bank illegally asked some would-be
home buyers who relied on disability income to provide a doctor’s letter
verifying the severity of their ailment. But it’s still unclear how
many people will ultimately be paid. There isn’t a full list of the
victims.
