DealBook: Regulators to Send First Batch of Checks to Troubled Borrowers

Ross D. Franklin/Associated PressA foreclosed home in Queen Creek, Ariz. Major lenders agreed to a $9.3 billion pact with regulators to settle claims of foreclosure abuses.

The nation’s top banking regulators have some good news for some troubled homeowners: the checks will be in the mail soon.

Months after brokering a multibillion-dollar settlement with banks over mortgage foreclosure abuses, the Federal Reserve and the Office of the Comptroller of the Currency are set to dole out roughly $1.2 billion in the first batch of payments. By April 12, the regulators expect to mail 1.4 million checks. An additional round of checks will be sent out by the middle of July, according to the regulators.

The settlement, which scuttled a deeply flawed review of millions of loans in foreclosure, will ultimately provide $3.6 billion in cash relief to borrowers who entered foreclosure in 2009 or 2010.

Among those borrowers in the first group to receive relief are the 1,082 service members who were foreclosed on illegally by banks. Under the settlement, each borrower will receive about $125,000, the largest amount of relief.

Homeowners who were foreclosed on even though they never missed a mortgage payment will also receive a check in the first round of payments. The comptroller’s office said that there were 53 such borrowers, whose homes will receive $125,000. Another 626 homeowners who were wrongfully foreclosed on will receive $5,000 to $15,000 in relief because their foreclosure was not completed or was reversed.

The largest category of borrowers slated to get money are the more than half a million homeowners who were deprived of a loan modification or other loss mitigation assistance. The 568,476 borrowers that fall into that group are to receive $300 each.

For millions of Americans battling to save their homes, the checks are the first federal lifeline in years, according to housing advocates.

In January, the comptroller’s office scuttled the foreclosure review, which was hobbled by delays and inefficiencies. Instead, the regulator brokered a $9.3 billion settlement involving $3.6 billion of cash payments and other forms of relief. The review, which was hastily dismantled, was ordered by bank regulators in 2011 amid mounting concerns that banks were churning through piles of foreclosure files without reviewing them for accuracy.

The independent consultants hired to pour over millions of loan files only reviewed a sliver of the foreclosed loans. As homeowners languished, regulators opted to end the review in favor of the settlement. Even so, many homeowners have been waiting to receive relief.

The announcement of the payments comes just days before the Senate Banking Committee is scheduled to hold a hearing on the foreclosure review. Last week, the Government Accountability Office issued a scathing report that took aim at the Federal Reserve and the Office of the Comptroller of the Currency.

The regulators, the report found, created a dizzying bureaucratic process that ultimately slowed relief to homeowners. Problems with the review began almost from the outset in November 2011, the report said.

Attorney Uses Yoga to Help Troubled Youth

A Grounded for Good yoga class at the Covenant House.
Photo courtesy of Robert Altman

It is no stretch to say that yoga has changed attorney Robert Altman's life for the better. Now, he's using it to help others.

Altman is a co-founder of Grounded for Good, a not-for-profit service project for abused, homeless and at-risk children at the Covenant House in southeast Atlanta.

The idea, he says, is that "yoga and mindfulness training could be a wonderful resource to calm, focus and heal young people who are facing the trauma and stress associated with abuse and homelessness."

Altman has been on a path of helping people for some time.

He did legal work early in his career representing Native Americans who had been prosecuted by the federal government for taking over a reservation in Wounded Knee, S.D., in 1973.

Altman moved to Atlanta in 1976 to work with Millard Farmer and Morris Dees in a project called Team Defense. "We went around the South representing mostly poor black defendants against whom prosecutors were seeking the death penalty in murder cases," he said.

He became the head of the federal public defender office for the Northern District of Georgia in 1980 and entered private practice four years later.

"In 2007," he said, "after more than 30 years as a litigator, I began winding down my practice to the point where I now spend most of my time working on my volunteer activity, traveling and exercising to stay healthy. I only handle a few selected cases that I take from time to time."

He talked to the Daily Report about his career and his new yoga service project, beginning with an obvious question.

Robert Altman?

The most it's ever got me was a table at a restaurant. The hostess asked me, "Are you the Robert Altman?" I said, "Well, I'm a Robert Altman."

She said, "We're full but I love his movies, so I'll find you a table."

When did you start doing yoga?

I started a yoga practice at the time I began winding down my law practice in 2007. I had a lot more time to enjoy activities like traveling, cycling, running and yoga.

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