"These payments hold the banks accountable, and the settlement puts a stop to some of the mortgage-servicing abuse we've seen in the past," Utah Attorney General John Swallow said in a statement.
When the deal was announced, officials said Utah was to get an estimated $170 million, with nearly $23 million of that in cash to the state. About $147 million was to go for different kinds of homeowner relief, including the payments going out this month, principal reductions and support for short sales and refinancing.
Juliette Tennert, chief economist in the state office of budget and management, said of the $22 million that actually went into the state treasury, $2 million was earmarked for a mortgage fraud program in the attorney general's office. The rest went into the general fund and mingled with other income that funds state government, she said.
"There were a number of housing initiatives in the Legislature, but mortgage fraud [in the attorney general's office] was the only program that was directly earmarked," said Tennert.
Groups that provide counseling to homeowners over mortgage issues are critical of the way the Legislature allocated the funds.
"[They] were intended to go for prevention and outreach and education to help the nonprofit credit counseling agencies help homeowners who were affected," said Preston Cochrane at the AAA Fair Credit Foundation. "But unlike other states that used the money for what it was intended for, Utah did not."
His group along with other advocates ended up laying off trained counselors and reducing services to homeowners, he said.
The national settlement administrator, Rust Consulting, is to mail 962,278 claim payments from June 10 through June 17, the attorney general's office said.
Some borrowers will receive a check for less than the $1,480 payment if they are divorced or separated and no longer live at the same address. Payments for them will be split between the borrowers.
Every borrower who filed a claim will receive a letter regarding their outcome, Utah officials said.
Borrowers with questions about their National Mortgage Settlement payment can call 1-866-430-8358. More information also can be found at www.NationalMortgageSettlement.com or from the OCC Independent Foreclosure Review at www.OCC.gov.