News Release: Attorney General's Office
August 21, 2014
TALLAHASSEE, Fla.—The Justice Department has entered a settlement with Bank of America, which will provide nearly 17,000 Floridians in excess of $1 billion in relief.
Eligible Floridians will receive first and second lien principal reductions, loan forgiveness and other relief. The total amount of consumer relief of the settlement nationally is $7 billion, and Florida’s share equals one-seventh of that total.
"Our office worked closely with Bank of America to ensure that Florida homeowners would be treated fairly in any settlement, and I’m pleased that Floridians will be receiving one-seventh of the overall consumer relief. As a result of the Justice Department's settlement with Bank of America, it's expected that Florida will receive just over $1 billion in homeowner relief, benefiting nearly 17,000 Florida homeowners,” stated Attorney General Pam Bondi.
“We very much appreciate the extensive investment of time spent by you and your staff in discussions with the Bank concerning the types and quantity of consumer relief to be delivered to Florida residents as part of any settlement with the U.S. Department of Justice,” stated Jana J. Litsey, Deputy General Counsel with Bank of America, in a letter to Attorney General Bondi.
The federal settlement addresses abuses primarily by Countrywide and Merrill Lynch which greatly contributed to the mortgage crisis. These companies securitized residential mortgage loans that had been obtained without ensuring that the borrowers could actually afford the mortgages. They then sold them to investors as so-called residential mortgage-backed securities without disclosing the significant risk that the borrowers holding the mortgages were unable to stay current on their loans because many of the loans had been written without proper review to ensure that the borrowers could actually afford the loans.
Bank of America acquired Countrywide and Merrill Lynch shortly before the financial crisis that resulted from unprecedented defaults on the ill-advised residential mortgage loans sold to investors around the country.