Bank of America this week finalized a record near $17 billion settlement with the Justice Department over fraud allegations stemming from the housing crisis. As ideastream’s Nick Castele reports, none of that money is specifically earmarked for Ohio, but it’s possible some could trickle down.
Federal government agencies will keep much of the money for themselves. And nearly a billion dollars will go directly to six states that joined the lawsuit – with California, Illinois and New York getting the lion’s share.
Ohio wasn’t a part of the lawsuit, so there’s no money earmarked for the state, though homeowners and housing agencies do have a chance to benefit.
The settlement requires Bank of America to make at least $50 million available for agencies including land banks, which buy abandoned houses and either demolish or rehabilitate them.
Frank Ford, a housing advocate with the Thriving Communities Institute, says that pot of money, plus funds from an earlier settlement with Citigroup, mean land banks can compete for pieces of a $75 million pie.
But Ford said the problem of abandoned housing is much bigger than that.
“It’s not on the scale of what we really need,” he said. “So even though we’re talking about $75 million for land banks. That's $75 million that will be available to all 50 states. And Ohio could use the $75 million total all on its own.”
Ford said even Cuyahoga County alone could use $75 million.
The share of relief going directly to homeowners will be greater. Bank of America is required to shell out a couple billion dollars in the form of reduced principal on their loans.