Arizona will receive $1.6 billion of the $26 billion settlement over bad foreclosure practices that government officials reached with the nation’s biggest lenders today.
Separately, the state will receive $10 million from Bank of America to settle its lawsuit over alleged mortgage fraud the Arizona Attorney General filed against the lender in December 2010. The settlement of that lawsuit, reached late last night, had to happen for Arizona to participate in the national settlement. BofA is also part of the nationwide settlement.
The $26 billion deal is the largest industry settlement since the multistate tobacco deal reached in 1998.
The money will go toward reducing the principal amount on borrower’s mortgages and compensating people who wrongly lost their home to foreclosure.
Besides BofA, Ally Financial, J.P. Mortgage Chase, Citigroup and Wells Fargo are part of the settlement. Those lenders hold more than half of all outstanding loans across the nation.
More details on Arizona’s separate settlement with BofA will be announced later today by Attorney General Tom Horne.
Negotiations on the national $26 billion settlement have been going on for the past year.
Arizona has ranked among the top five states for foreclosures during the housing crash.