Illinois Attorney General Lisa Madigan stops in Rockford with what could be good news for struggling homeowners.
Back in February, Lisa Madigan and 48 other state attorneys general worked with the U.S. Department of Justice and the U.S. Department of Housing and Urban Development to reach a $25 billion settlement with the country's five largest mortgage servicers.
This settlement resolves allegations that Bank of America, JPMorgan Chase, Wells Fargo, Citibank, and Ally Bank. formerly GMAC, routinely filed false documents in foreclosure cases. It's commonly called 'robo-signing.'
Area homeowner Connie Brinker and her roommate have a history of trouble with Bank of America.
"They actually refinanced my house without telling either one of us, and up'd my payment by $250 a month, up'd my interest rate, and I said 'No, that doesn't help me at all.'" -says Brinker.
Madigan says the settlement will bring an estimated $1 billion worth of relief to Illinois homeowners alone, through mortgage modifications, refinancing, and restitution. Homeowners who worked with one of those five banks could get direct assistance from those institutions if they qualify. These direct-borrower funds will assist those who have lost their homes, owe more than their houses are worth, or are at risk of defaulting on their mortgages. Brinker hopes to qualify for this homeowner relief program. Attorney General Madigan says there are three ways you could be eligible for benefits, but only if you worked with or are working with one of the aforementioned five banks. The first is if you lost your home anytime between the beginning of 2008 to the end of 2011. Second, if you owe more on your home than it's worth, your mortgage payments are 30 days or more behind, or you're at risk of falling behind on those payments. The third way to qualify is if you owe more on your home than it's worth, you've been current on your mortgage for the last 12 months, your interest rate is in excess of 5.25%, and you're seeking to refinance that loan.
Separately, the multi-billion dollar settlement also brings about $100 million to the state in cash, to help counteract the affects of the foreclosure crisis. The $100 million is split two ways; $80 million goes to court mediation programs and other programs working to fix the impacts of this crisis. Madigan committed the other $20 million to legal aid organizations in the state. One of those is Prairie State Legal Services. Its main office is in Rockford, but it operates 11 offices total and covers more than 30 Northern and Central Illinois counties. Prairie State is getting $4.5 million, almost a fourth of that $20 million dollar deal. That money will help add staff to assist more homeowners.
"We're going to put essentially 13 attorneys throughout our 36 counties full-time on the work of doing foreclosure representation. It's certainly not going to be enough to help everybody but it is a complete change in the ground." -says Prairie State Legal Services Executive Director Michael O'Connor.
If you have further eligibility questions, contact your mortgage servicer, or, call the Illinois Attorney General's Homeowner Hotline at 1-866-544-7151.
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