Nevada Attorney General Catherine Cortez Masto struck a separate deal with Bank of America (BAC) in conjunction with the $25 billion foreclosure settlement this week.
One in 16 Nevada homes received at least one foreclosure filing in 2011, the fifth straight year the state held the highest foreclosure rate in the country. Blight and vacant homes sliced home values by more than 60% since the peak in 2006.
As part of the deal with all five servicers, Nevada will get an estimated $1.3 billion in principal reductions, short deficiency forgiveness and other relief. Borrowers in the state who lost their home to foreclosure and qualify for a pay out, will receive a total of $57 million. Another $42 million will go toward refinances, and the state itself will receive $60 million in penalties from the five servicers.
But to get this deal, Masto needed to resolve previous claims it brought against BofA.
In August, Masto filed an amended complaint against the bank, claiming it was in violation of a consent judgment struck in 2008. To settle origination and servicing fraud claims against Countrywide, which BofA acquired in January 2008, the bank agreed to provide a specific amount of modifications.
Masto claimed BofA wasn’t living up to its end of the deal, and requested information on relating to mortgage servicing procedures.
Masto and BofA agreed to settle the feud this week, however. As part of the deal, BofA will provide an additional $750 million in first and second lien principal reductions and short sale deficiencies in the state.
The bank will also be required to freeze foreclosure sales of any borrower eligible for the modification program set up for Countrywide borrowers, and it must pay an additional $30 million fine to the state, on top of the $60 million sent through the wider robo-signing deal.
“We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track,” BofA said in a statement sent after the wider foreclosure settlement was announced.
Masto said this week she would still be pursuing criminal claims and some civil investigations against Lender Processing Services (LPS) and other firms she claims engaged in deceptive foreclosure practices.
“This settlement represents a step in the right direction,” Masto said. “Nevada did well.”