EverBank to pay $43 million in foreclosure settlement

The Office of the Comptroller of the Currency said Friday that EverBank Financial will pay $43.3 million to borrowers and housing groups, a deal that addresses accusations that the Jacksonville, Fla.-based bank mismanaged foreclosures.

EverBank was one of 16 mortgage servicers that struck a deal with the OCC and the Federal Reserve in 2011, after homeowners accused it of using forged and shoddy paperwork to rapidly foreclose, a practice known as “robo-signing.”

The servicers agreed to an independent review of their foreclosure files, a process that was scrapped a year later by most of the firms once regulators realized it was not helping borrowers.

EverBank, however, continued with the process of reviewing each mortgage file. No homeowners received any compensation during the bank’s review, prompting regulators to encourage EverBank to abandon the process, according to the OCC.

Under the terms of the new agreement, EverBank will provide about $37 million in cash payments to more than 32,000 mortgage borrowers. People whose homes were in any stage of foreclosure from 2009 to 2010 will receive cash payments ranging from $1,050 to $125,000.

Eligible borrowers, who will be contacted by a third-party agent that has yet to be named, will receive compensation whether or not they filed a request for review. Accepting compensation does not preclude borrowers from taking additional legal action against EverBank.

The bank also has agreed to give $6.3 million to organizations that promote affordable housing or help with foreclosure prevention. EverBank plans to evaluate eligible borrowers still in the process of foreclosure for a reduction of their monthly mortgage payments.

EverBank declined to comment on the agreement. In a filing announcing the deal, the company said it expects to record an after-tax charge of about $20 million in the third quarter as it sets aside money for the cash payment portion of the settlement.

As it stands, OneWest Bank is the only servicer that has not abandoned the foreclosure review. Late last month, GMAC Mortgage gave up on the process and agreed to pay $9.6 billion in compensation and mortgage relief.

As a result of the revised regulatory agreement, more than 3 million checks worth about $2.7 billion have been cashed or deposited to date.

There have been a number of hiccups along the way. Many of the first checks bounced, while a later batch had the wrong amounts. Regulators quickly rectified the problems, but have come under fire for the mishaps.

Members of Congress are still raising questions about the original review — 12 months went by without borrowers receiving restitution while the eight consultants managing the process were paid nearly $2 billion.

Danielle Douglas covers the banking industry for The Washington Post.
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