Illinois homeowners receive $14 billion from national foreclosure settlement

February 21, 2013

Online Staff Report

CHICAGO — In responding to the third report issued by the national foreclosure settlement’s independent compliance monitor, Illinois Attorney General Lisa Madigan (D) outlined the direct relief Illinois borrowers have received as a result of the $25 billion settlement reached last year with the nation’s five largest bank mortgage servicers over allegations of widespread “robo-signing” and other fraudulent practices involved in servicing loans of struggling homeowners.

The monitor’s report covers compliance activities from March 1 to Dec. 31, 2012, and details how much relief Illinois borrowers have received under the settlement. In the first 10 months of the settlement’s implementation, 20,044 Illinois consumers have already received more than $1.44 billion in relief, which equates to an average of $71,927 in direct assistance per borrower, in the form of principal reductions, refinancing for underwater loans and other relief. Significantly, of those receiving assistance in Illinois, nearly 2,400 homeowners received first-lien principal reductions averaging $114,809.

This latest progress report is encouraging,” Madigan said. “When the national settlement was announced, Illinois borrowers were projected to receive approximately $1 billion in direct relief. Now, not even a year into the implementation of the settlement, assistance for Illinois borrowers has already surpassed that initial estimate. Thousands of families throughout Illinois have received the lifeline they so desperately needed. What’s also promising is that thousands more Illinois borrowers are on track to receive assistance as mortgage servicers continue to deliver what they promised.”

In addition to the direct relief for Illinois borrowers, the attorney general’s office has recovered money from the banks to counteract the effects of historic levels of foreclosures on homeowners and communities, including funding for legal aid services, housing counseling, outreach to borrowers, housing policy development and community revitalization. Madigan urged distressed Illinois homeowners to call their regional legal aid office to learn more about the services and resources offered in their area.

Chicago residents should call LAF (Legal Assistance Foundation of Metropolitan Chicago) at (312) 341-1070 or visit http://www.lafchicago.org/.

Northern and western Illinois residents (outside the city of Chicago) should call Prairie State Legal Services at (815) 965-2134 or visit http://www.pslegal.org/.

Southern Illinois residents should call Land of Lincoln Legal Assistance Foundation at (618) 398-0574 or visit http://www.lollaf.org/office.html.

For homeowners with more questions about the national settlement, they should contact Madigan’s Homeowner’s Helpline at 866-544-7151, or visit her website, www.illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html. Borrowers also can visit www.NationalForeclosureSettlement.com.

Stay on the lookout for scams

Madigan also urged caution for homeowners seeking relief and warned them to be on the lookout for scammers trying to exploit homeowners by indicating they may be eligible for settlement relief or mortgage assistance if they make an upfront cash payment — a telltale sign that the offer is a scam.

Madigan has filed 50 lawsuits against these so-called mortgage “rescue” schemes in which the operators target desperate homeowners on the verge of foreclosure, claiming that for a hefty upfront fee, the scam operators can save a distressed borrower’s home by negotiating a deal with a homeowner’s lender, when in reality, the scammers do nothing as promised, causing the homeowner to fall further behind on their mortgage and putting them on a faster track toward foreclosure.

Madigan urged struggling homeowners to avoid such solicited calls and offers and instead to contact her Homeowner Helpline, 866-544-7151, for assistance in finding free, legitimate help through a housing counselor certified by the U.S. Department of Housing and Urban Development.

Posted Feb. 21, 2013

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