Sen. Duff: Federal-state settlement helps families keep homes
State Sen. Bob Duff (D-Norwalk) has praised the announcement by state and federal authorities of a $25 billion settlement with five leading mortgage lenders as a victory for Connecticut residents in need of financial relief. The settlement represents the largest joint federal-state financial settlement in history; Connecticut's share of the settlement is approximately $200 million.
"This settlement represents a victory for Connecticut residents," said Duff, who is Senate Chairman of the legislature's banks committee. "It provides financial assistance to help families stay in their homes, grant payments up to $2,000 to borrowers that were the victims of unfair foreclosure practices and establishes state-level foreclosure prevention programs. I want to thank Attorney General Jepsen for playing a critical role in putting an end to abusive lending practices by lenders and ensuring Connecticut residents impacted by he foreclosure received some compensation."
Under the terms of the settlement:
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- Connecticut borrowers will receive an estimated $119 million in benefits from loan term modifications and other direct relief;
- The estimated 7,500 Connecticut borrowers who lost their homes to foreclosure from Jan. 1, 2008 through Dec. 31, 2011 and who suffered servicing abuse will qualify for an estimated $1,500 in cash payments to individual borrowers;
- The value of refinanced loans to Connecticut's underwater borrowers is an estimated $36 million;
- The state will receive a direct payment estimated at $27 million to help fund local foreclosure prevention programs, such as the Connecticut Department of Banking's foreclosure prevention hotline, HUD-approved housing counselors, the Judicial Branch's foreclosure mediation program, nonprofit legal aid groups that help homeowners facing foreclosure and loan modification programs supported by the Connecticut Housing Finance Authority.