Lender that cut off brokers on the hook to borrowers for $37m

by Adam Smith26 Aug 2013

A major lender that recently cut off its broker channel has now agreed to pay out $37m to borrowers it foreclosed upon.

EverBank, which last month announced it would shutter its wholesale broker lending business, has greed to make cash payments to more than 32,000 borrowers whose homes were in any stage of foreclosure with the bank in 2009 and 2010. The lender was the subject of a cease and desist order for "unsafe and unsound practices in mortgage servicing", according to the Office of the Comptroller of the Currency (OCC).

Under the agreement, borrowers will receive cash compensation ranging from $1,050 to $125,000 plus equity. The OCC said that borrowers who accept a payment won't be prevented from taking further action related to their foreclosure.

The bank will also pay out around $6.3m to HUD-certified organizations or other tax-exempt organizations that focus on providing affordable housing, foreclosure prevention and/or educational assistance to low- and moderate-income individuals or families.

"EverBank also will evaluate each eligible borrower still in the process of foreclosure for a new loan modification, where investor contracts allow, and will establish a special complaint process to resolve borrower complaints regarding credit report errors," the OCC said.

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