Fla. AG asks for public input on how to spend settlement funds

Jessica M. Karmasek May 1, 2012, 11:30am


TALLAHASSEE, Fla. (Legal Newsline) - Florida Attorney General Pam Bondi is asking state residents how best to spend $300 million, recovered on behalf of consumers as part of the nationwide mortgage settlement.

In February, federal officials and 49 state attorneys general, including Bondi, reached a $25 billion agreement with Wells Fargo and Co., JPMorgan Chase and Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp. over their alleged improper foreclosure practices.

Florida's share of the total monetary benefits under the settlement is about $8.4 billion.

Of that, Florida borrowers will receive an estimated $7.6 billion in benefits from loan modifications, including principal reduction and other direct relief.

About $170 million will be available for cash payments to Florida borrowers who lost their home to foreclosure from Jan. 1, 2008 through Dec. 31, 2011 and suffered servicing abuse.

The value of refinanced loans to Florida's underwater borrowers would be an estimated $309 million.

On top of which, the state will receive a direct payment of $350 million.

Under the terms of the court-approved settlement, the attorney general must direct about $300 million in consumer relief for purposes intended to avoid preventable foreclosures, to improve the effects of the foreclosure crisis, and to enhance law enforcement efforts against financial fraud.

On Monday, Bondi reached out to the public for suggestions on how to distribute the $300 million.

"Florida is one of the hardest hit states in the country in terms of foreclosures, and I'd like to hear from Floridians about ways we can help homeowners and offset the devastation caused by the foreclosure crisis," she said in a statement.

Residents can submit their suggestions to Bondi's office online through May 14.

The attorney general said she will evaluate the input from the public, interested stakeholders and representatives of the Governor's Office and the state Legislature before distributing any of the funds.

The settlement agreement lists permissible uses of the settlement funds, including: housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, and training and staffing of financial fraud or consumer protection enforcement efforts.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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