TRENTON — Democratic lawmakers are anticipating $50 million from a settlement with the nation’s largest banks over mortgage servicing flaws, according to recently released budget documents. In the wake of the economic crisis, federal regulators and state attorney generals — including New Jersey Attorney General Paula Dow — have been investigating bank mortgage and foreclosure practices that came to...
Attorney General Paula Dow.TRENTON — Democratic lawmakers are anticipating $50 million from a settlement with the nation’s largest banks over mortgage servicing flaws, according to recently released budget documents.
In the wake of the economic crisis, federal regulators and state attorney generals — including New Jersey Attorney General Paula Dow — have been investigating bank mortgage and foreclosure practices that came to light last years, such as the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.
Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial made a settlement offer earlier this year of $5 billion, far short of the the $20 billion that the states and federal agencies sought.
Discussions are ongoing.
New Jersey can expect up to 3 percent of the final figure, says Tom Hester, a spokesman for the Assembly Democrats. The $50 million figure represents 1 percent of the banks’ offer.
Gov. Chris Christie had not put any money from the settlement in his 2012 budget.
Democrats hope to use the money to help restore the governor’s cuts to education, Medicaid and a host of other areas as part of their $30.6 billion budget proposal.
The Democrats’ proposal is roughly $1 billion higher than the governor.
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