Settlement with Mortgage Lenders to Benefit Illinois Homeowners

A few weeks ago, the federal goverment, alongside state attorney generals, announced a $25 billion settlement with five large mortgage lenders — Bank of America, Chase, Wells Fargo, Citibank, and Ally Financial (GMAC).    Among other things, the lenders were accused of “robosigning” — that is, signing documents that caused foreclosure without a thorough investigation of the facts, and failing to negotiate with homeowners in good faith, ultimately leading to default and foreclosure.  The majority of the settlement funds — $17 billion specifically — is earmarked towards providing relief to approximately one million homeowners nationwide.  Most of this relief will probably come in the form of principal reductions on the homeowners’ mortgages. 

Illinois is expected to receive between $1 and $1.5 billion.  As an Illinois homeowner, if you meet one or more of the following criteria, you may benefit from this settlement agreement:

1)  If you were foreclosed between 2008 and 2011, and one of the five banks involved in this settlement was servicing your loan.
2)  You owe more than your home is worth to one of the five banks involved.
3)  You are more than thirty days behind on your mortgage payments to one of the five banks involved.
4)  You are at risk of falling behind on your mortgage payments to one of the five banks involved.

Based on your individual situation, you may qualify for having your mortgage refinanced, or for a settlement check (estimated between $1500 and $2000). 

Overall, the settlement aims to assist nearly two million families affected by the foreclosure crisis nationwide.  The federal government and the state attorney generals are still trying to get another 9 mortgage lenders to sign on to the settlement, which could increase the settlement funds by up to another $5 billion.