The monitor of the Bank of America mortgage settlement distributed roughly $89 million Tuesday to legal assistance groups in nine states from a fund for federal tax assistance.
The distributions were made to groups in Florida, Georgia, Pennsylvania, Washington, Arizona, Virginia, Missouri, New Jersey and Oregon, according to a press release from the settlement's monitor, Eric Green. The money came from $490 million allocated as part of the bank's post-crisis agreement, three-quarters of which must be disbursed to all 50 states, the District of Columbia and U.S. territories and possessions.
The recipient groups are state-based Interest on Lawyers Trust Account organizations and state bar association affiliated intermediaries that provide resources to legal aid organizations. The remaining 25% of the funds, roughly $122.5 million, was already distributed to NeighborWorks America, a congressionally chartered nonprofit geared toward community-based redevelopment programs.
President Obama set the distribution process in motion in December when he signed into law legislation that provided tax relief through this year to homeowners who could incur income-tax liability due to mortgage debt forgiveness received as part of the settlement's consumer-relief provisions. The $490 million had previously been set aside in a fund created in case Congress did not extend the tax relief to provide federal assistance.
The settlement set up the distributions so that the 56 state-based legal assistance organizations initially get $200,000 from the fund. The remaining balance is then apportioned among the states and other jurisdictions based on U.S. Census Bureau-collected poverty population data.
Already this month, approximately $31 million in distributions was made to groups in North Carolina, South Carolina, Massachusetts and Indiana. The remaining distributions are expected to be in the near future, pending completion of documentation by the recipient organizations.