The Connecticut Bar Foundation Inc. has received $2.8 million from Bank of America to resolve fraudulent mortgage practices. The funds will be used to provide legal assistance in foreclosure prevention and community redevelopment.
The foundation, headquartered in Hartford, is one of 56 state-based legal-assistance organizations receiving funds under the settlement, which settled legal claims arising from mortgage-related activities by Bank of America and its subsidiaries. As specified in the settlement, these recipients are state-based Interest on Lawyers Trust Account (IOLTA) organizations, or other state bar association affiliated intermediaries that fund legal aid organizations in their jurisdictions.
The distributions – totaling more than $490 million nationwide – were triggered in December by President 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.
