WASHINGTON (CBSDC/AP) — U.S. states have reached a $25 billion deal with the nation’s biggest mortgage lenders over foreclosure abuses that occurred after the housing bubble burst.
Under the agreement, which totals about $25 billion nationwide, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial will reduce loans for nearly 1 million households in the U.S.
All but one of the 50 states agreed to the deal. Oklahoma is the only state that didn’t agree to the deal.
Homeowners in Washington will be eligible for up to $40 million from a massive settlement with the nation’s largest mortgage lenders.
Nationally, the settlement is valued at $25 billion. It covers foreclosure abuses that occurred after the housing bubble burst. Five of the largest lenders will have to reduce loans for about 1 million households, and about 750,000 Americans who were improperly foreclosed upon will get $2,000 checks.
District of Columbia Attorney General Irvin Nathan said Thursday that about $40 million of the settlement is available to homeowners in the district. But the final amount will depend on how many choose to reduce and refinance their loans.
Mayor Vincent Gray says even those who don’t get money from the settlement will benefit from the reduction in unnecessary foreclosures.
Maryland will receive about $960 million as part of a 49-state mortgage foreclosure settlement with the nation’s five largest mortgage servicers, Attorney General Doug Gansler announced Thursday.
Gansler said the deal will help thousands of Marylanders stay in their homes through enhanced loan modifications and other services. The attorney general said the agreement also requires comprehensive reform of mortgage loan servicing standards.
“This agreement will provide direct, imminent, and significant relief at last to thousands of Maryland homeowners,” Gansler said in a statement. “It is a down payment and a first step toward lasting reform of the mortgage industry.”
Money from the settlement will be used for individual payments to borrowers who were victims of unfair servicing practices and were foreclosed upon between Jan. 1, 2008, and December 31, 2011, according to Gansler’s office.
Virginian and home borrowers in the state will receive about $479.6 million in relief from a $25 billion settlement between states and five mortgage lenders over foreclosure abuses.
Federal and state officials announced the deal Thursday.
Attorney General Ken Cuccinelli says the banks will make cash payments totaling more than $31 million to Virginians who experienced foreclosure abuses from Jan. 1, 2008 to Dec. 31, 2011.
Under the agreement, the banks also will modify loan terms and provide other relief to Virginia home borrowers. Cuccinelli says this relief totals more than $409 million.
The banks will pay the state more than $69.6 million.
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