Gov. Dannel Malloy and Attorney General George Jepsen announced on Monday that the $190 million Connecticut received as a part of a $25 billion mortgage abuse settlement with the country's five largest servicers will be spent to bolster and expand programs assisting the state's distressed homeowners, according to a statement released by Malloy's office.
The settlement, , will provide an estimated $119 million in loan modification and refinancing relief to the state's homeowners, an estimated $7.3 million to foreclosure victims and $28.1 million in payments to the state to offset the effects of the foreclosure crises. The settlement will be also used to support state and nonprofit initiatives that provide direct assistance to homeowners facing foreclosure.
“At a time when other states are using money from this settlement to plug holes in their budgets, Connecticut is taking a different path,” Malloy said in the statement “We know that many homeowners are still struggling, and until we find a way to bring stability to the housing market, there will continue to be a drag on our recovery. This funding will help assist a critical component of our overall economic goal, to promote economic growth that is sustainable and benefits a majority of our residents.”
A large bulk of the money—$21 million—will be used to directly fund the Connecticut Housing Finance Authority's Emergency Mortgage Assistance Program and pay for debt service associated with state bonds previously issued for the program. The Department of Banking’s Foreclosure Prevention Hotline and the Connecticut Fair Housing Center will also receive a share of the settlement.