Shady lenders and over-zealous borrowers collapsed the house market in 2006. As a result, millions lost their homes; to make restitution the nation’s five largest banks are paying back 25 billion dollars.
“Florida’s total monetary benefits under this settlement are over eight billion dollars,” said Attorney General Pam Bondi.
Thursday, Bondi laid out plans for spending the first 60 million dollars of the settlement money. Legislative leaders were on hand praising Bondi’s work securing the cash.
“That settlement between the attorneys general and the banks did not just happen. It had to be worked for, it had to be fight for,” said Will Weatherford.
The bulk of the money won’t go to people who lost their homes in the foreclosure crisis. Of the 60 million dollars available through this program, 35 million will go to first time homebuyers with the remaining 25 going to people fighting foreclosure.
Why are new homebuyers getting a bigger cut than people who’ve already lost their homes?
“The settlement provides, as settlements do, that there are other areas related to housing that settlement money can be used for,” said Don Gaetz.
Under the down payment assistance portion of the program, first-time homebuyers will get 7,500 dollars a piece to make a down payment on a house.
“If you provide the right kind of assistance in terms of a little bit of guidance and insight as well as money, you have less likelihood for a foreclosure in the future,” said Gaetz.
Another program started with the settlement money promises about a thousand dollars to people who’ve lost their homes to foreclosure. Last Friday was the deadline to claim the cash, but after a lackluster turnout, the deadline was extended.
Part of the problem with getting money to foreclosure victims is tracking them down, but there will be other opportunities. There’s another 200 million dollars available for future programs. Plus banks are working with underwater borrowers to lower payments and assist with short sales.