In major settlement with the nation's largest mortgage lenders, Maryland, Virginina and D.C. will be receiving millions in assistance for distressed homeowners.
"This historic settlement will provide immediate relief to homeowners - forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers," said HUD Secretary Donovan. "Banks must follow the laws. Any bank that hasn't done so should be held accountable and should take prompt action to correct its mistakes."
A spokesman for the Maryland attorney general says his state will receive $960 million as part of a 49-state mortgage foreclosure settlement. The large size of Maryland's share of the settlement is proportionate to the impact of home foreclosures there.
In Virginia, the state will receive $479.6 million from the settlement. 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. Over $400 million will be spent on loan modifications and other relief programs for Virginia homeowners.
Around $40 million will be made available to D.C. homeowners, but that number depends on how many residents sign up for loan relief programs. The District will also get $4.6 million, for use as cash payments to to those who lost their homes to foreclosure between 2008 and 2011.
Under the settlement, five major banks including Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial will pay roughly $26 billion to reimburse American homeowners and overhaul their industry.
Oklahoma is the only state that did not agree to the deal.