Illinois To Receive $3 Million For Foreclosure Mediation Programs

By aaroncynic in News on Jul 18, 2012 9:00PM

Attorney General Lisa Madigan announced yesterday that Illinois will receive up to $3 million in funding from the national foreclosure settlement reached earlier this year. Madigan joined a suit with 49 other state attorneys general against the five largest mortgage servicers in the country which addressed foreclosure abuses and fraud, particularly “robo-signing” of foreclosure documents. In February, a $25 billion settlement was reached with the nation’s five largest bank mortgage servicers - Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Bank.

Last month, Madigan announced $1 billion of that would go to homeowners in Illinois who were harmed by fraudulent foreclosure practices. NBC5 reported that money would be used to offer refinancing options and principal reductions for homeowners owing more on their houses than what they’re currently worth.

The $3 million will go to fund new mortgage foreclosure mediation programs in counties where they do not already exist. In a press release, Madigan said “Effective mediation programs are proven to give homeowners a fighting chance to save their homes. Borrowers who’ve gone through foreclosure mediation have significantly better chances at receiving a loan modification and reaching a positive outcome.”

Additionally, $20 million in grants will go to fund legal assistance programs. The remainder of the funds received will go to initiatives such as outreach and community revitalization which will counteract foreclosure levels.