WASHINGTON -- Goldman Sachs and Morgan Stanley will begin sending $247 million in payments on Friday to nearly a quarter-million people under a settlement of foreclosure-abuse allegations with regulators, the Federal Reserve said.
The two Wall Street giants are the last of 13 mortgage servicers to begin making the payments to borrowers whose homes were in foreclosure proceedings in 2009 and 2010.
The servicers, which also included Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co., agreed to pay $3.6 billion to more than 4.2 million borrowers in a settlement reached in January.
The other servicers began making payments on April 12. Goldman Sachs and Morgan Stanley settled about a week later than the other banks, so they were on a different track to begin making payments.
Checks will range from $300 to more than $125,000 for troubled borrowers whose mortgages were serviced by Litton Loan Servicing, a former subsidiary of Goldman Sachs, and Saxon Mortgage Services, a former subsidiary of Morgan Stanley, the Fed said Monday.
As with the other servicers, the payments will be made by mid-July.
Borrowers who were eligible for payments already have received notification postcards from Rust Consulting Inc., the company handling the payments, the Fed said.
Most borrowers will get a check in the mail from Rust with the payment. But some borrowers might get a letter asking for additional information before the payment can be processed.
The Fed said this month that some of the payment checks had bounced, but the problem had been corrected.
As of Friday, about 1.2 million checks with a value of about $1.2 billion had been cashed or deposited in homeowners' accounts.
Borrowers with questions about the settlement payments can call Rust at (888) 952-9105.
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