$60M available to Floridians in foreclosure settlement

Published On: Jan 24 2013 04:22:02 PM EST
Updated On: Jan 24 2013 04:23:06 PM EST
Foreclosure file

Gregg Canes/CNN

TALLAHASSEE, Fla. -

There's $60 million available to Floridians right now through the foreclosure crisis settlement.

Shady lenders and over-zealous borrowers collapsed the house market in 2006. As a result, millions lost their homes. To make restitution, the nation's five largest banks are paying back $25 billion for bad lending practices that collapsed the housing market.

"Florida's total monetary benefits under this settlement are over $8 billion," Attorney General Pam Bondi said.

Bondi laid out plans for spending the first $60 million of the settlement money. Legislative leaders were on hand praising Bondi's work securing the cash.

"That settlement between the attorneys general and the banks did not just happen. It had to be worked for, it had to be fought for," Rep. Will Weatherford said.

The bulk of the money won't go to people who lost their homes in the foreclosure crisis. Of the $60 million available through this program, $35 million will go to first-time home buyers, with the remaining $25 million going to people fighting foreclosure.

So why are new home buyers getting a bigger cut than people who have already lost their homes?

"The settlement provides, as settlements do, that there are other areas related to housing that settlement money can be used for," Sen. Don Gaetz said.

Under the down payment assistance portion of the program, first-time homebuyers will get $7,500 a piece to make a down payment on a house.

"If you provide the right kind of assistance in terms of a little bit of guidance and insight as well as money, you have less likelihood for a foreclosure in the future," Gaetz said.

Another program started with the settlement money promises about $1,000 to people who've lost their homes to foreclosure. Last Friday was the deadline to claim the cash, but after a lackluster turnout, the deadline was extended.

Part of the problem with getting money to foreclosure victims is tracking them down, but there will be other opportunities. There's another $200 million available for future programs. Plus, banks are working with underwater borrowers to lower payments and assist with short sales.

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