April 4, 2012 – (RealEstateRama) — On March, 12, 2012, the final negotiated agreements between the states, the federal government and Bank of America, Citi, JP Morgan Chase, Ally/GMAC, and Wells Forgo were filed with the Court. In addition to requiring changes in the way the banks service their loans, the settlement provides approximately $25 billion for loan modifications, refinancing, payments to people who lost their homes to foreclosure, and direct payments to the states.
Under the terms of the agreement, the Pennsylvania Office of the Attorney General will receive $66,527,978. While the use of the funds is not mandated by the agreement, the documents do state that the funds will be distributed to the Office of Attorney General, to be allocated by the Attorney General, at her sole discretion, to the Office of Attorney General and the Pennsylvania Department of Banking to further their respective educational and law enforcement purposes; and the balance to be allocated by the Attorney General, at her sole discretion, to appropriate programs that help Pennsylvania homeowners avoid foreclosure.
Attorney General Kelly has stated publicly that she believes the money received by her office from the settlement should be used for purposes related to mortgage foreclosure, including funding for the Homeowners Emergency Mortgage Assistance Program (HEMAP). HEMAP was closed to new applicants last July due to a shortage of funds. The General Assembly appropriated only $2 million for HEMAP which had received $11 million the year before. Gov. Corbett had proposed no funding for the program and has again zeroed out HEMAP in his 2012-13 budget proposal.
The PA General Assembly is also speaking out on how the settlement money should be spent. Many representatives and senators have signed onto letters to the Attorney General urging her to fund HEMAP. In addition, Sen. Gordner has introduced a bill that would direct 90% of the funds to HEMAP and 10% to the Attorney General’s Office for consumer protection. Similar bills are being prepared in the House.
Sen. Gordner’s bill has 23 cosponsors, including senators from both parties. As originally drafted, the bill called for 60% of the funds for HEMAP, 5% to the Attorney General, and 35% to other housing programs at the PA Housing Finance Agency (PHFA). The percentages were changed due to concern about whether the final language of the agreement would allow the money to be used for other housing programs.
We now know that the use of the funds is not limited. The agreement states:
Each State Attorney General shall designate the uses of the funds set forth in the attached exhibit B-1. To the extent practicable, such funds shall be used for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the B-3 foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial fraud, or unfair or deceptive acts or practices and to compensate the States for costs resulting from the alleged unlawful conduct of the Defendants. Such permissible purposes for allocation of the funds include, but are not limited to, supplementing the amounts paid to state homeowners under the Borrower Payment Fund, funding for housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, funding for training and staffing of financial fraud or consumer protection enforcement efforts, and civil penalties. (Emphasis added.)
The Housing Alliance believes that all of the funds should be dedicated to rebuilding the housing market, and that the money should go to the PA Housing Finance Agency (PHFA) with the bulk of it going to HEMAP. Other programs which would be appropriate for funding from the Settlement funds include housing counseling, legal services, attention to vacant properties (such as supporting land banks for acquisition and rehab or demolition), and balancing the housing market by adding more affordable homes.
- Senator Democrat Letter to the Attorney General
- House Democrat Letter to the Attorney General
- House Letter to the Attorney General
- House Letter to Governor Corbett
For more informatin on the settlement go to http://www.nationalmortgagesettlement.com/ or http://portal.hud.gov/hudportal/HUD?src=/mortgageservicingsettlement.
No related posts.
- SeniorCare Network of Oakmont Selected for State’s Supportive Housing Award
- PHFA announces $19.5 million in tax credits and $81 million in tax exempt financing for affordable multifamily developments in Pennsylvania
- Summer Food Service Program Offers Healthy Meals and Activities
- Pennsylvania Home Builder Settles FTC Charges of Deceptive Mortgage Advertising
- Governor Corbett Announces Grant Award to Help Cumberland County Residents with Permanent Physical Disabilities Remain in Homes
- Local Congressmen Announce New Federal Aid for Rebuilding Water and Sewer Infrastructure
- PA Treasury Works to Reunite Law Enforcement Units with Nearly $135,000 in Unclaimed Property during National Police Week
- Congressman Doyle, Community Leaders Convene Homelessness Forum: September 3 Event at CMU to Focus on the Increasing Rate of Homelessness
- PHA To Use On-line Housing Applications For First Time
- PHFA announces keynote speakers for May Housing Forum
- Congressional Budget Impasse Threatens Homes for Thousands of Pennsylvanians
- Notice of Filing of Securities Class Action Against Inland Western Retail Real Estate Trust, Inc., Certain of Its Directors, Officers and Affiliates, and William Blair & Company, L.L.C.
- Will Get Down Payment Help; Affordable Housing; 3,000 New Jobs with $380 Million in Recovery Funds
- FREE PROPERTY TAX/RENT REBATE APPLICATION FILING HELP AVAILABLE IN JOHNSTOWN NOV. 14
- The Great Escape Theatres Opens New 14-Screen Theater at Feldman Mall Properties' Harrisburg Mall
- $222.7 Million In Property Tax/Rent Rebates Distributed To Older Adults, Residents With Disabilities
- Grubb & Ellis Company Announces Recent Transactions