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Connecticut to Get $190M from Servicer Settlement

Residents of Connecticut will receive $190 million from the historic $25-billion settlement with five servicers, according to the office of the state attorney general.

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Funds from the settlement will overwhelmingly benefit Connecticut residents in need of loan-term modifications, according to Attorney General ""George Jepsen"":http://www.ct.gov/ag/site/default.asp, who drummed up the details in a statement.

Estimates for the value of refinance loans hover around $36 million. Connecticut will also benefit from $27 million doled out for foreclosure prevention programs.

""There are many reasons why I believe this settlement is good for Connecticut, but the most important reason is this: it provides immediate help to thousands of

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Connecticut homeowners at a time when they can still use that help to save their homes,"" Jepsen said in the statement.

""For the first time, state attorneys general will have authority to monitor how federally regulated banks comply with the new servicing rules and to impose heavy penalties on those banks that fall short,"" he added.

Federal officials and 49 state attorneys general, including Jepsen, negotiated with the nation's five largest servicers ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô including ""Ally Financial"":http://www.ally.com/financial/, ""Bank of America"":https://www.bankofamerica.com/, ""Citigroup"":http://www.citigroup.com/citi/homepage/, ""JPMorgan Chase"":http://www.jpmorganchase.com/corporate/Home/home.htm, and ""Wells Fargo"":https://www.wellsfargo.com/ ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô to secure roughly $25 billion for homeowners in every state except Oklahoma.

The attorney general for Oklahoma obtained a separate settlement with the servicers last week.

As part of the settlement, servicers will provide $17 billion to borrowers via relief options, including principal reductions, with an estimated $32 billion potentially on the way in direct relief.

Servicers agreed to offer $3 billion in refinance opportunities to mortgage borrowers who are also current on their loans and $5 billion to state and federal authorities, with about $4 billion for the former and $750 million for the latter.

The settlement did not absolve the servicers of civil and criminal claims, with individual borrowers and investors free to pursue their own cases.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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