As part of a multistate settlement with five of the nation's largest mortgage companies, Missouri and its taxpayers will receive more than $196 million.
Attorneys general nationwide joined in the joint federal-state agreement that came about due to allegations of foreclosure abuses, unfair mortgage servicing practices and fraud by Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial, according to a Feb. 9 news release from Attorney General Chris Koster's office.
“This settlement provides much needed relief to a broad spectrum of Missourians - those who have already been foreclosed on, those who are current on their payments but underwater on their mortgages, and those who are struggling with their current payments but could make more reasonable ones,” Koster said in the release. “Through millions of dollars in principal reductions, this settlement makes it easier for Missourians to stay in their homes.”
Missourians are eligible to receive a number of benefits under the settlement:
- Borrowers whose homes are worth less than what they owe and who are current on their payment will be able to refinance, allowing for an estimated $38 million in savings.
- Borrowers whose homes are worth less than what they owe and are behind on payments but could afford to make them at a reduced rate will receive an estimated $86.5 million in principal reductions and other borrower assistance programs.
- Borrowers who lost their homes Jan. 1, 2008-Dec. 31, 2011, due to foreclosure and were victims of servicing abuse will receive about $31 million in direct payments, roughly $2,000 per borrower.
The settlement also allowed attorneys general to negotiate direct payments to the state. Koster said he will direct more than $40 million to the state's general revenue fund to address budget shortages.
Gov. Jay Nixon has said the new general revenue funds would benefit public colleges and universities, and he's amending his recommended budget for fiscal 2013, in which
he proposed $89 million in cuts for four-year higher education institutions.
“This has been a lengthy and extremely complex settlement process, and I commend Attorney General Koster for his dedicated and persistent leadership at every stage of the negotiations,” Nixon said in a separate news release. "Now that we have additional information about the settlement, I am immediately amending my recommended budget to restore $40 million in funding for Missouri’s colleges and universities."[[In-content Ad]]
