Money Clawed Back From Banks During Mortgage Crisis Goes for Affordable Housing

2:23 PM, Jun 7, 2013   |    comments
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SILVER SPRING, Md. (WUSA9) --  Money clawed back from banks busted for predatory lending and robo-signing during the nation's mortgage meltdown is being distributed to dozens of groups working to stabilize affordable housing neighborhoods.

Maryland Attorney General Douglas F. Gansler and the Maryland Department of Housing and Community Development $16.9 million in Neighborhood Conservation Initiative grant funds to be spent on homeowner assistance programs and rehabilitation projects across the state. 

The money comes from the $26 billion National Mortgage Settlement and a separate $120 million national settlement with Lender Processing Services, Inc., which allegedly robo-signed documents and engaged in other mortgage servicing abuses.

One example of how the money will be used is provided by the Montgomery Housing partnership which was awarded with $500 thousand to purchase a boarded up apartment building in the 8800 block of Glenwood Road in Silver Spring. 

The non-profit agency already owns four buildings in the area which has resulted in a reduction in crime and more stability for families in need of affordable housing in Montgomery County's expensive housing market.

According to the latest quarterly progress report issued by the Court-appointed Monitor of the National Mortgage Settlement, more than 16,000 Maryland homeowners have received more than $1.3 billion in relief - with an additional $60 million in process - as of March 31, 2013.

In February, money from the settlement and funds from DHCD provided $11.8 million in grants to 39 members of the Maryland HOPE Counseling Network, representing the highest level of funding for foreclosure prevention counseling in state history.

Additionally, $6.2 million in settlement funds coupled with $2.8 million from DHCD has been allocated to nine legal aid nonprofits to expand services to distressed homeowners across Maryland.

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