On August 20, 2014, the US Department of Justice, Bank of America, and six states reached an agreement that aimed to settle claims that BofA, Countrywide, Merrill Lynch, and First Franklin violated federal and state laws in connection with the packaging, origination, marketing, sale, structuring, arrangement, and issuance of residential mortgage-backed securities and collateralized debt obligations.
The ILF is one of the 56 state-based legal-assistance organizations receiving funds under the settlement. The distributions (which total more than $490 million nationwide) were triggered in December by President Obama’s signing into law an act that extends federal tax relief through 2016 to homeowners who would’ve otherwise incurred income-tax liability from mortgage debt forgiveness they received under the settlement’s consumer-relief provisions.
The money stems from a fund established under the settlement to provide federal tax assistance to homeowners in case Congress fails to extend the tax-relief legislation. Under the terms of the settlement, Green is required to distribute 75% ($367.62 million) of the fund to eligible legal-assistance organizations in each state. The remaining 25% ($122.54 million) will go to NeighborWorks America, a nonprofit organization that provides training and support for community-based redevelopment programs in the US and Puerto Rico.
The settlement stipulates that the legal-assistance organizations in each state, the District of Columbia, and each US territory or possession are to receive $200,000 from the fund to the extent practicable. The remaining funds will be allocated among the states and other eligible jurisdictions based on the poverty population data gathered by the US Census Bureau.
Professor Eric D. Green — a Boston-based professional mediator and independent monitor of Bank of America’s 2014 mortgage settlement with state and federal authorities — just announced the distribution of $1.89 million to the Idaho Law Foundation (ILF). The settlement is designed to provide legal assistance in foreclosure prevention and community redevelopment.