Direct Payments to Signing States Explained
The National Mortgage Settlement is a landmark joint state-federal settlement with the country's five largest loan servicers – Ally/GMAC, Bank of America, Citi, JPMorgan Chase, Wells Fargo. The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. The states have received $2.5 billion as a direct payment to "purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, [and] to enhance law enforcement efforts to prevent and prosecute financial fraud."
However, some recent reports indicate that the states are allocating their share of settlement to plug budget holes instead of investing in homeowner relief and programs aimed at preventing future foreclosure abuse. According to the recent data from ProPublica and other sources the states have allocated their money anywhere from softening cuts in education to attracting new businesses to the state in order to create more jobs. The graph and attached Excel table provides more detailed insight on how the funds were allocated. Note: the data will be updated as more states announce their allocation.
Download the Table: Direct Payments to Signing States Explained