Helena, MT- Montana’s Attorney General Steve Bullock announced that the state’s portion of the national foreclosure settlement will go towards programs aimed at preventing foreclosure.
All states got a portion of the $25 billion settlement major banks agreed to pay after their mortgage servicing practices were scrutinized by the federal government. An investigation revealed that banks used robo-signing and fraudulent documents to initiate the foreclosure process.
Montana received $5.8 million of the national settlement and will apply the majority of those funds to counseling. In a statement, Bullock said “greed” and “rampant abuse of our financial system” harmed millions of homeowners.
Housing counselors inform troubled homeowners of their alternatives to foreclosure such as mortgage modification and help them with their finances. About $3 million of the funds will be used to hire new counselors at NeighborWorks Montana.
A recent HUD survey showed that 69 percent of people in the midst of foreclosure benefited from counseling and were able to get current on their mortgage payments or avert foreclosure.
Additional funds, roughly $1 million from the settlement will be used to help homeowners retain foreclosure attorneys. The remainder of the settlement will be used to prosecute financial fraud and deceptive practices.
While Montana is using the national settlement funds to help struggling homeowners other states such as Arizona, Georgia, Wisconsin and Maine diverted the funds to bridge their budget gaps instead of foreclosure prevention.