Attorney General Roy Cooper announced today that N.C. will receive $338 million in assistance as part of a multibillion dollar federal settlement with five of the nation’s largest banks over foreclosure abuses.
The deal offers some help to struggling homeowners, but experts view it as more of a moral victory with limited impact on the broader housing market.
Cooper was in Washington, D.C. this morning joining other state attorney generals and federal officials in announcing a $26 billion settlement with Bank of American, Wells Fargo and three other major banks. The settlement aims to give financial relief to homeowners and establish new homeowner protections for the future.
The protections also include installing an independent national monitor to oversee the banks. That team will be led by N.C. Banking Commissioner Joe Smith. Smith will work from Raleigh
Bank of America will bear the bulk of the settlement. They’re responsible for an $11.8 billion payout, including a $3.24 billion in federal and state payments and $8.58 billion in relief to borrowers. Wells Fargo will pay $5.4 billion; J.P. Morgan, $5.3 billion; Citigroup, $2.2 billion; and Ally, $310 million.
The national funds coming to North Carolina include $63.7 million to provide for legal help, financial fraud detection and prosecution, $33.57 million in payments to foreclosure victims and $179.51 million in principal reduction and other assistance for at risk homeowners, and $61.52 million for refinancing loan.
“We think this is a big step,” Cooper said. “It certainly will not be a cure all for all of the financial meltdown and for all of the problems. But it’s a big step to help correct the problems up to servicing of loans and the foreclosures and the fraudulent documents that were filed. Banks just did not do what they were supposed to do on the back end of these loans.”
