Connecticut Receives $190M in National Settlement

Connecticut is set to receive more than $190 million from the multi-state settlement with the nation's largest mortgage servicers.

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""There are many reasons why I believe this settlement is good for Connecticut, but the most important reason is this: it provides immediate help to thousands of Connecticut homeowners at a time when they can still use that help to save their homes,"" said Connecticut Attorney

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General George Jepsen, who served on the negotiating committee that established the settlement with the banks.

While $27 million will be paid directly to the state for foreclosure prevention efforts, including housing counseling, the rest will be distributed to borrowers through relief to troubled homeowners and compensation to those who lost their homes after misconduct by their servicer.

About $119 million will go to loan modifications ""and other direct relief,"" according to the attorney general's office.

Another $36 million will help underwater homeowners refinance their loans.

Lastly, about 7,500 borrowers who were impacted by wrongful actions of their servicers and lost their homes to foreclosure will qualify to receive about $1,500 each.

In addition to these monetary penalties, ""[f]or the first time, state attorneys general will have authority to monitor how federally regulated banks comply with the new servicing rules and to impose heavy penalties on those banks that fall short,"" Jepson said.