By Jeff Harrington, Times Staff Writer
Thursday, February 9, 2012
Struggling Florida homeowners will receive $8.4 billion through loan modifications, lowered principal and other relief as part of a landmark $25 billion federal-state agreement with five of the country's biggest banks.
Florida Attorney General Pam Bondi confirmed the state's participation in the settlement Thursday morning.
"This agreement holds banks accountable and puts in place new protections for homeowners in the form of strict mortgage servicing standards," Bondi said in a statement.
Figures on how many homeowners will benefit from the program were not immediately available, but the number could be well more than 100,000 in the Tampa Bay area alone.
Federal and state officials had been negotiating more than a year, probing accusations that lenders had used robo-signers and false documentation to speed up the foreclosure process.
The groundwork for the deal was paved Wednesday after California and New York, two of the biggest holdout states, agreed to participate. One of the sticking points in the 11th hour was determining guaranteed amounts for high-foreclosure states like California and Florida.
Bondi, who was in Tampa Thursday for a Cabinet meeting at the Florida State Fairgrounds, tried to dispel notions that Florida was not an active participant in the talks.
"We've been extremely active in the negotiations the entire time," she said, alluding to some 20 hour days for members of her staff.
"We were determined to never walk away from the negotiating table, which was very important because Florida has been part of the executive committee. We were determined to get the absolutely best result for the citizens of Florida because Florida was one of the hardest hits states in the country."
Florida's share of the benefits includes:
• An estimated $7.6 billion in benefits from loan modifications, including principal reduction, and other direct relief.
• About $170 million in cash payments to Florida borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and had "suffered servicing abuse."
• About $309 million toward refinanced loans to Florida borrowers who are currently "underwater," owing more on their mortgages than their home is worth.
• A direct payment of $350 million to the state of Florida.
Here's the bad news. The financial relief won't arrive any time soon.
Because of the complexity of the agreement — the second-largest civil settlement in U.S. history next to 1998's tobacco deal — federal officials said borrowers will not immediately know if they are even eligible. And the timetable for a payout is lengthy.
Over the next 30 to 60 days, negotiators will pick an administrator to handle logistics of the settlement and to monitor compliance.
Then it will take another six to nine months for the administrator, the attorneys general of 49 states and the mortgage servicers to identify which homeowners would qualify for immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.
The settlement will be executed over the next three years.
Check back here for frequent updates.
Times staff writer Bill Varian contributed to this report.