ANNAPOLIS, Md. (AP) -- Maryland will receive about $960 million as part of a 49-state mortgage foreclosure settlement with the nation's five largest mortgage servicers, Attorney General Doug Gansler announced Thursday.
Under the agreement, which totals about $25 billion nationwide, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial will reduce loans for nearly 1 million households in the U.S.
Gansler said the deal will help thousands of Marylanders stay in their homes through enhanced loan modifications and other services. The attorney general said the agreement also requires comprehensive reform of mortgage loan servicing standards.
"This agreement will provide direct, imminent, and significant relief at last to thousands of Maryland homeowners," Gansler said in a statement. "It is a down payment and a first step toward lasting reform of the mortgage industry."
Money from the settlement will be used for individual payments to borrowers who were victims of unfair servicing practices and were foreclosed upon between Jan. 1, 2008, and December 31, 2011, according to Gansler's office.
Money also will be used for loss mitigation programs, such as loan modifications, forbearance plans and short sales for homeowners with loans serviced by the banks.
Refinancing for homeowners with loans owned and serviced by the five banks who are current in their payments but who owe more than their homes are worth also will be available.
Money from the settlement also will be used for housing counseling and other state-level foreclosure prevention and housing programs.
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