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HomeNewsLocal newsV.I. Legal Assistance Foundation Receives $368,000 in Bank of America Mortgage Settlement

V.I. Legal Assistance Foundation Receives $368,000 in Bank of America Mortgage Settlement

The V.I. Legal Assistance Foundation is getting $368,000 as part of a federal settlement with Bank of America. The money has to go toward legal assistance to prevent mortgage foreclosure and to community redevelopment.

The V.I. Legal Assistance Foundation supports legal aid for V.I. residents and overseas charitable contributions from interest on money held in trust by the courts during civil disputes.

Eric Green, the independent monitor of the settlement, announced the V.I. distribution on Wednesday.

The foundation headquartered in Christiansted is one of 56 legal-assistance organizations in the United States and territories receiving funds under the settlement, which settled legal claims arising from mortgage-related activities by Bank of America and its subsidiaries.

A distribution was made earlier to NeighborWorks America, a national, congressionally chartered nonprofit organization that provides training and support for community-based redevelopment programs in the United States and Puerto Rico.

The distributions, totaling more than $490 million nationwide, were triggered in December by President Barack Obama’s signing into law an act extending federal tax relief through 2016 to homeowners who otherwise would have incurred income-tax liability from mortgage debt forgiveness they received under consumer-relief provisions of the settlement. The money being distributed to the nonprofit organizations is from a fund established under the settlement to provide federal tax assistance to homeowners in case Congress failed to extend the tax-relief legislation.

With the signing of the legislation, the tax-relief fund became surplus. Under the terms of the settlement, Green is required to distribute 75 percent, or $367.62 million of the fund to eligible legal-assistance organizations in each state and the remaining 25 percent, or $122.54 million, to NeighborWorks America.

The settlement provides that in each state, the District of Columbia, and each U.S. territory or possession, the legal-assistance organizations are to receive a distribution of $200,000 from the fund, with the remainder to be allocated among the states and other eligible jurisdictions based on poverty population data. The settlement specifies these recipients are to be state-based Interest on Lawyers Trust Account organizations or other state bar association-affiliated intermediaries that fund legal aid organizations in their jurisdictions.

Cosignatories to the settlement, besides the bank and the Department of Justice, were the Attorneys General of the States of California, Delaware, Illinois, Maryland and New York, and the Commonwealth of Kentucky. Eligible legal-assistance organizations in all six "settling states" have received their distributions, as have organizations in a number of other jurisdictions.

The remaining distributions will be made in the coming days upon completion of appropriate documentation by the recipient organizations.

Green, a Boston-based professional mediator and retired Boston University law professor, was hired as independent monitor to oversee the tax-relief fund and the bank’s compliance with its ongoing consumer-relief obligations under the settlement.

A full list of recipient organizations and more information about the settlement is available at the monitor’s website: http://bankofamerica.mortgagesettlementmonitor.com.

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