BofA settlement targets distressed borrowers
Bank must provide about $7 billion in aid to mortgage borrowers over four years.
Bank of America’s $16.65 billion settlement with the federal and state authorities, targets low-income homeowners and distressed mortgage owners who were hit by the foreclosure crisis and its consequences.
The deal for Bank of America is to dole out all aid by August 31, 2018.
The relief will include reductions in mortgage principal and forbearance, mortgage lending to low- and moderate-income families, renewing depressed areas, and expanding affordable rental housing.
Bank of America could fulfill its obligation without actually spending the $7 billion because providing certain kinds of assistance will earn it extra credit.
The significant consumer-relief component of the settlement is heartening, says Andrew Jakabovics, a former federal housing official who now works for Enterprise Community Partners, an affordable housing non-profit organization. “The fact that there is such a focus on consumer relief, I think, is encouraging,” he says.
“I think that this consumer-relief settlement, in a number of ways, is likely to provide more and deeper relief to borrowers and neighborhoods that were most affected by the foreclosure crisis,” says Paul Leonard, the California director of the Center for Responsible Lending.
Some see the relief as a step toward advancing public policy initiatives stalled in Congress.
Source: Usatoday
