Pa. to get $266 million in mortgage-lending settlement

A $26 billion settlement between the country’s biggest mortgage lenders and multiple states will mean $266 million for Pennsylvania homeowners and borrowers.

The deal was struck after states went after five big banks for mortgage service abuses, such as the “robo-signing” of documents.

State Attorney General Linda Kelly says the funds will be designated to help Pennsylvanians avoid foreclosure and refinance if they owe more than their homes are worth, as well as borrowers who have lost their homes.

“In addition to the financial terms of the agreement, the settlement contains new protection for homeowners designed to prevent future foreclosure abuses,” Kelly said Thursday.

In addition to nearly $200 million in homeowner and borrower relief, the settlement will pay almost $70 million directly to the commonwealth’s attorney general’s office.

Housing advocates already are eyeing the money to reinstate a Pennsylvania program cut last year that helped people avoid foreclosure.

The settlement is with Ally Financial, Bank of America, Citigroup, JPMorganChase and Wells Fargo.