Ten mortgage servicing companies have reached an agreement with the Office of the Comptroller of the Currency and the Federal Reserve Board and will pay more than $8.5 billion in cash payments and other assistance to wronged borrowers.

In 2011, the regulators issued a report identifying “critical weaknesses” in the foreclosure practices of 14 mortgage servicers and violations of federal and state law.

The settlement, announced on Monday, includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion for loan modifications and forgiveness of deficiency judgments. Signing off on it were Aurora Loan Services, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. Not agreeing to the deal were HSBC Holdings' U.S. bank division, Ally Financial, OneWest Bank, and Everbank.

The agreement, according to a statement by the OCC and Federal Reserve Board, ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation ranging from hundreds of dollars up to $125,000, depending on the type of error they suffered. A payment agent will be appointed and eligible borrowers will be contacted by the end of March with details. As part of the deal, borrowers will not be required to waive legal claims against their servicer as a condition for receiving payment.

For the participating servicers, fulfillment of the agreement means they will no longer have to take part in a case-by-case Independent Foreclosure Review. Those reviews, part of the 2011 enforcement action, have come under fire for the high costs charged by independent consultants.

In their statement, the OCC and Federal Reserve Board said they accepted the agreement because “it provides the greatest benefit to consumers” and does so in a more timely fashion than the review process would have allowed.

“We have learned a great deal from the reviews that have been conducted to date, Comptroller of the Currency Thomas Curry said in a statement. “However, it has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers. Our new course of action will get more money to more people more quickly.”

The announcement came despite pressure by some legislators to delay settlements pending further review.In a joint letter to the two regulators, Reps. Darrell Issa (R-Calif.) and Elijah Cummings (D-MD), the chairman and ranking member of the House Committee on Oversight and Government Reform, requested such a briefing.

“In light of recent press reports suggesting that a settlement may replace the Independent Foreclosure Review process, we respectfully request a staff briefing prior to the conclusion of the reported settlement agreement,” they wrote. “We would like more information about how the potential settlement amount is to be determined in light of potential wrongdoing identified to date, how such aid may be distributed and in what form, and what may happen to homeowner files that are still awaiting review.”

The agreement with regulators also comes the same day Bank of America agreed to pay more than $10 billion to government-backed mortgage lender the Federal National Mortgage Association, better known as Fannie Mae, to settle claims made over now-bad mortgages, many of which originated with the Countrywide Financial unit purchased in 2008.

The agreement covers current and future repurchase obligations related to loans with an outstanding unpaid principal balance of $297 billion originated between Jan. 1, 2000 and Dec. 31, 2008. Bank of America will make a cash payment to Fannie Mae of $3.55 billion and repurchase approximately 30,000 loans for approximately $6.75 billion.