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Mortgage Companies Give Florida $3.6 Billion For Bad Deals

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401(K) 2012 /Flickr

Florida's Attorney General Pam Bondi announced that five of the country's biggest mortgage companies are forking over $3.6 billion dollars for "foreclosure abuses and unacceptable mortgage servicing practices," which spurred the state's foreclosure crisis.

The money is part of a federal-state settlement brokered on behalf of the thousands of Floridians who improperly lost their homes.

According to a press release from Bondi's office, 

[These companies] reported that 48,998 Floridians have benefitted from an average of $73,663 in relief per borrower.  Nationally, the servicers report that more than 300,000 borrowers have received a total of $26.11 billion in relief and an average of $84,385 in relief per borrower.

There have been disagreements between Bondi and state lawmakers on how to spend some of this money, which went straight to the state for foreclosure relief. They also disagreed on who ultimately had the authority to decide how it's spent. 
Bondi announced that much of this relief for borrowers will come in different forms. Here are some of the ways those billions are being spent-- or will be spent:

  • First and second lien modifications
  • Enhanced borrower transitional funds
  • Facilitation of short sales
  • Deficiency waivers
  • Forbearance for unemployed borrowers
  • Anti-blight activities
  • Refinancing programs
  • Benefits for members of the Armed Forces

According to Bondi's office, there are also ways for some to still claim relief:

Florida borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011 and who may be eligible for payment under the $25 billion national mortgage foreclosure settlement must file claims by Jan.18, 2013. Forms have been mailed to qualified borrowers. Borrowers who have questions or need help filing their claims can contact the settlement administrator, toll-free, at 1-866-430-8358, or send questions by email to administrator@nationalmortgagesettlement.com.

South Florida-- and Miami, in particular-- was one of the areas hit hardest by the state's foreclosure crisis. Since the late 2000s, the area has been slowly recovering.