Florida set to get $1 billion from U.S. Department of Justice settlement with BOA
The U.S. Department of Justice announced a record settlement with Bank of America on Thursday that will provide $1 billion in relief for about 17,000 Floridians.
But it’s still not clear which ones will qualify.
They’ll likely be in addition to the 120,000 who were offered $9.2 billion in relief in a separate 2012 settlement with the nation’s largest banks, including Bank of America.
On Thursday morning in Washington, U.S. Attorney General Eric Holder Jr. announced the newest settlement with Bank of America -- a $16.65 billion mortgage deal that includes a $9.65 billion cash penalty and $7 billion in relief to homeowners and blighted areas. It’s the largest government settlement by a company in U.S. history.
The settlement was the result of multiple U.S. attorney offices investigating the seemingly endless reams of bad mortgages approved by Countrywide Financial and Merrill Lynch, which Bank of America bought. Along with the Department of Justice, six states -- California, Delaware, Kentucky, Illinois, Maryland, New York -- were party to the settlement. While Florida Attorney General Pam Bondi’s office was not involved in the settlement, it had discussions with Bank of America regarding how Florida homeowners would be affected.
What’s not known yet is how most consumers affected by the foreclosure crisis will be helped. Of that $7 billion in homeowner relief and aid to blighted areas, Florida will get about $1 billion. It’s not clear which Floridians or blighted areas will be eligible for aid. According to Bondi’s office, consumer relief will come in the form of first and second lien principal reductions, loan forgiveness and other relief.
Although both Thursday’s announcement and the 2012 National Mortgage Settlement tout large penalties, some experts say consumers don’t get much relief.
“It’s all accounting tricks,” said Matt Weidner, a St. Petersburg consumer protection attorney. “Rather than provide real relief to consumers, these settlements provide tax relief to the banks.”