Maryland’s share of the $17 billion Bank of America settlement includes $75 million in compensation for state and local governments and their pension plans — and that’s not counting the bank’s agreement to provide consumer relief via such things as mortgage forgiveness, community reinvestment and affordable rental housing.
BofA will expend a minimum of $150 million on consumer relief efforts in Maryland, Delaware and Kentucky, according to Maryland Attorney General Douglas F. Gansler.
“With this settlement, Maryland takes another step towards resolving the widespread economic damage caused by these lenders and the mortgage crisis they created out of sheer greed,” Gansler said in a statement. “Marylanders will benefit as defrauded state and local government pension plans receive compensation and distressed consumers receive additional mortgage-related relief and assistance.”
All told, the bank must provide $7 billion in consumer relief to eligible consumers in the forms of mortgage forgiveness and forbearance, low to moderate income lending, community reinvestment and neighborhood stabilization, and affordable rental housing.
Maryland is one of six states that, along with the federal government, pursued the case against Bank of America over allegations that the bank and two companies it later acquired — Countrywide Funding Corp. and Merrill Lynch — unlawfully packaged, marketed, issued and sold residential mortgage-backed securities that contained toxic mortgages.
An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations under this settlement, Gansler’s office said. BofA has established a hotline for consumers to call if they have questions about the settlement at (877) 488-7814.
Reports of the $16.65 billion deal surfaced Wednesday and were confirmed Thursday by New York Attorney General Eric T. Schneiderman, co-chair of the Residential Mortgage-Backed Securities Working Group, a joint state and federal working group that investigates wrongdoing in the MBS market.
The settlement is the largest in U.S. history with a single institution, surpassing the $13 billion settlement with JPMorgan Chase that was secured by the same state and federal working group last November, Schneiderman’s office said.