JACKSONVILLE, Fla. - Barnett Banks Inc. has settled a lawsuit in which Florida's attorney general challenged its methods for calculating mortgage escrow payments.
Under an agreement announced Friday, the $41.8 billion-asset banking company said its Barnett Mortgage Co. unit will provide $10 credits to 110,000 current mortgage customers, and $5 credits to an unspecified number of former customers. In all, the company will pay out $1.4 million.
Barnett Mortgage said it is also reviewing 143,000 mortgage customers' escrow accounts, and intends to reduce them by an average of $69.93 over the next 12 months.
Florida's attorney general brought suit against Barnett and other Florida lenders last November, charging they had not properly interpreted the laws covering the methodology for determining escrow payments.
Francis Seabrook, president of Barnett Mortgage Co., said in a prepared statement that the company was in compliance with all regulatory guidelines regarding escrow accounts. He said Barnett settled the case to "avoid the time and costs associated with litigation."