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Fraction of Florida's $9 billion bank settlement goes toward keeping people in homes

The nationwide settlement absolving big banks of foreclosure abuse has led to more than $9 billion in Florida relief, but most of that money did not go toward keeping people in their homes, a final report released Thursday shows.

About 120,000 Florida borrowers have been given relief through the agreement reached last year between state and federal agencies and five of the nation's largest banks.

But three out of every four dollars here were spent toward forgiving home-equity loans, much of which banks would have never collected, and approving short sales that likely would have happened anyway.

Fewer than one out of five Floridians given relief were offered mortgages with a lower principal or interest rate, which could have kept them in their homes. Another 30,000 Floridians are in trials for loan modifications that have not yet been completed.

Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo agreed to the $25 billion national settlement to resolve accusations of "robo-signing" documents to speed up foreclosures and other abuses.

Attorney General Pam Bondi, who criticized Bank of America in June for failing to follow the settlement rules, said the independent report showed banks had "exceeded our expectations for relief."

But in a letter this week to Attorney General Eric Holder, Sen. Elizabeth Warren, D-Massachusetts, said she worried that "settling on the cheap" was a "timid enforcement strategy" allowing banks to dodge trial.

Contact Drew Harwell at (727) 893-8252 or [email protected]

Fraction of Florida's $9 billion bank settlement goes toward keeping people in homes 08/22/13 [Last modified: Monday, September 2, 2013 5:25pm]
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