Massive mortgage settlement to provide $15M for foreclosure services

March 28, 2012 12:00PM

The mortgage settlement will provide $15 million for foreclosure prevention and other related services, according to a statement from the New York attorney general’s office today.

The allocation will provide up to $9 million for the state’s foreclosure prevention services program, which was set to expire April 1, and up to $6 million for community-based housing organizations, the statement said.

The $26 billion settlement reached in February between numerous state attorneys general and the country’s five largest mortgage servicers will afford New York State a total of $136 million. The balance of the funds goes toward direct relief, in payments of $1,500 and $2,000, to borrowers who have already lost their homes and in principal reductions for borrowers whose loans are serviced by the five major mortgage providers.

The settlement, formally filed just two weeks ago, has enraged some American homeowners because it applies only to about one million borrowers.

“Funding for legal services is an essential first step in bringing relief to the homeowners and communities that have been devastated by the crash of the housing market,” AG Eric Schneiderman said in the statement. — Guelda Voien