CHARLESTON - Federal officials and 49 state attorneys general, including West Virginia's Darrell McGraw, have reached a $25 billion agreement with the nation's five largest mortgage servicers.
The U.S. Department of Justice made the announcement Thursday morning.
As part of the multistate deal, West Virginia will get more than $33 million in assistance for struggling homeowners, McGraw said in a statement Thursday.
Of that, an immediate estimated payment of $2,000 will go to each state homeowner who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.
More than $18 million will go to loan modifications and benefits to state homeowners currently in default or foreclosure.
More than $5 million will go to free refinancing for "underwater" but current state homeowners.
Another $6 million will go to foreclosure and mortgage assistance and prevention programs in West Virginia.
Talks between the attorneys general, federal officials and the five banks -- Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp. -- dragged on for months before a deal was struck this week.
The probe, which began in October 2010 with inquiries into so-called "robosigning" practices, broadened into identifying and addressing additional alleged improper foreclosure practices.
McGraw noted that the multistate settlement -- which only covers those mortgages held by the five banks, not Fannie Mae or Freddie Mac -- is not a "get out of jail free" card for the banks.
The agreement institutes new protections for homeowners and nationwide reforms to mortgage servicing standards, he said.
It also gives state attorneys general oversight of the five banks for the first time -- something, McGraw noted, no court could award.
More importantly, it leaves the door open for tough legal remedies for mortgage-related misconduct, he said.
"Meaningful settlements like this that serve a measure of justice are important to us all," he said Thursday.
The settlement is one of the largest civil settlements ever obtained by the nation's attorneys general -- second only to their 1998 settlement with the tobacco companies.
The final agreement, through a consent judgment, will be filed in the U.S. District Court for the District of Columbia, to be overseen by an independent monitor with the backing of a federal court order.