Tennessee will participate in the $25 billion agreement with the nation’s five largest mortgage servicers, state Attorney General Bob Cooper announced Thursday.

The agreement arises from an investigation into unacceptable nationwide mortgage servicing and foreclosure practices. The servicers participating are Bank of America, JPMorgan Chase, Citi, GMAC/Ally Financial, and Wells Fargo.

Once approved by the court, the agreement will provide an estimated $146 million in relief to Tennessee homeowners and addresses future mortgage loan servicing practices. 

“This agreement avoids protracted and costly litigation while providing significant and tangible relief to distressed homeowners,” Cooper said in a release.  “The benefits of this agreement today far outweigh the possible benefits that might be obtained after several years in court.  Homeowners need the help now and an orderly resolution of these claims is in everyone’s interests.”

Under the agreement, certain Tennessee homeowners who are current on their loans with the settling servicers but have not been able to refinance at lower interest rates may have an opportunity to do so.  Other provisions would require the servicers to reduce the loan balance of qualifying homeowners who owe more than their homes are worth. 

Tennesseans who have lost their home to foreclosures by the settling companies from 2008 to 2011 may qualify for cash payments under certain circumstances.  Funds from the agreement will also be used to help all borrowers across Tennessee, whether or not their loans were serviced by the settling companies, through free foreclosure prevention counseling and other housing and legal assistance programs. 

More information can be found here.