Georgians who were victims of mortgage fraud will share in a $25 billion federal settlement. The state’s attorney general announced Thursday the agreement will also provide $100 million for homeowners who owe more than the value of their homes.
Georgia’s share of the settlement with the nation’s five largest mortgage servicers is about $800 million.
The agreement covers Bank of America, Wells Fargo and three other banks.
Georgians will receive $82 million, or about $2000 per home, if they lost their properties through an abusive foreclosure process. The agreement affects about 41,000 people in Georgia.
Attorney general Sam Olens says the deal helps homeowners who owe more than the home’s value to refinance at a rate that’s below 5.25 percent.
“That will really encourage folks to stay in their homes," he said at a press conference. "And if you happen to live next to someone who’s struggling to make that payment, that’s a huge gain so that you have a home with a family next to you rather than a vacant home that further reduces the value of your property.”
The deal sets stricter rules governing mortgages. For example, banks will now have to consider other steps before foreclosing. Special provisions will allow military service members to hold short sales and modify their loans more easily.
“Under previous federal programs, you had to be untimely with your monthly mortgage payments in order to qualify," Olens said. "As to service members, you’ll be able to take full advantage of programs even if you’re making that monthly payment in a timely manner.”
OIens said the federal government is in settlement talks with nine other mortgage servicers, including SunTrust.