Connecticut To Receive $190 Million In Foreclosure Abuse Settlement

After 15 months of negotiations over mortgage and foreclosure abuses including robo-signing, the federal government and several state attorneys general, including Connecticut Attorney General Jepsen, reached a $25 billion settlement with the nation’s five largest mortgage servicers: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial Inc. (formerly GMAC). The Department of Justice recently released details of the largest joint federal-state legal settlement in history.
Connecticut will receive $190 million from the settlement, which will be distributed as follows:

• Connecticut borrowers will receive approximately $119 million in benefits from loan term modifications and other direct relief.
• Approximately 7,500 Connecticut borrowers who lost their home to foreclosure between January 1, 2008 and December 31, 2011 and suffered servicing abuse will qualify for roughly $1,500 in cash payments to individual borrowers.
• The value of refinanced loans to Connecticut’s underwater borrowers will be an estimated $36 million.
• The state will receive a direct payment of approximately $27 million to help pay for local foreclosure prevention programs, HUD-approved housing counselors, the Judicial Branch’s foreclosure mediation program, non-profit legal aid groups that help homeowners facing foreclosure, and Connecticut Housing Finance Authority loan modification programs.