MADIGAN ANNOUNCES $4.7 MILLION GRANT FOR FREE LEGAL HELP FOR CHICAGO AREA HOMEOWNERS

Attorney General Distributes Funds from National Foreclosure Settlement Over Banks’ Illegal ‘Robo-signing,’ Servicing Practices

Chicago, IL – August 28, 2012 – (RealEstateRama) — Attorney General Lisa Madigan today announced that her office has distributed $4.7 million in funding from the national foreclosure settlement reached earlier this year to LAF (Legal Assistance Foundation). Madigan said the grant will help provide much-needed legal services to struggling homeowners in Chicago and suburban Cook County.

The Attorney General made her announcement today during a press conference at LAF’s offices. The funding stems from Madigan’s role in securing a $25 billion national settlement in February with the nation’s five largest bank mortgage servicers – Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Bank, formerly GMAC. The settlement addressed allegations of widespread “robo-signing” of foreclosure documents and other fraudulent practices bank servicers engaged in while servicing loans of struggling homeowners.

As part of the national settlement, Madigan’s office recovered money from the banks to remediate the historic levels of foreclosure in Illinois. Today’s announcement is among the first distributions of that funding, which as a whole will benefit legal assistance programs, housing counseling services and community revitalization efforts to counteract the impact of foreclosures on communities throughout Illinois. Madigan announced in April she would commit to distribute $20 million of the funds recovered in the settlement to legal aid services. The Attorney General’s office is continuing to analyze grant proposals toward that goal.

“This grant money will translate into real help for homeowners who otherwise never would have received it, because the need far exceeds the current legal aid resources,” Madigan said. “By ensuring that more homeowners in Chicago and suburban Cook County have an advocate, we can give more people a fighting chance to save their homes and help stabilize communities throughout the region.”

For more than 40 years, LAF has provided people living in poverty in metropolitan Chicago with comprehensive free legal services to resolve non-criminal issues. Each year, LAF’s more than 80 full-time attorneys and staff help resolve civil legal problems, including foreclosure, domestic violence, consumer fraud and unfair evictions. LAF’s work impacts about 55,000 people each year.

With the $4.7 million in funding, LAF will conduct outreach to distressed homeowners and provide a full range of legal services to prevent homeowners and renters from losing their homes. LAF will help homeowners preserve their home equity and collaborate with courts to make improvements to the Cook County Foreclosure Mediation Program. LAF will also use the funding to support the positions of nearly 20 attorneys and paralegals to expand legal services to more distressed homeowners and renters in subsidized housing, and coordinate legal training seminars on foreclosure defense and consumer bankruptcy throughout the state.

“With the additional funding from the Attorney General, LAF will be able to expand its efforts to educate and help clients threatened with the loss of their homes,” Executive Director Diana White said. “The foreclosure crisis has ravaged so many communities and families in our service area – but now we can really fight back.”

In addition to the cash payments directed to the state, Illinois borrowers will receive an estimated $1 billion in direct relief as a result of the national settlement to assist those who have lost their homes, are underwater or at imminent risk of defaulting on their mortgages. The settlement will also completely overhaul mortgage servicing standards to prevent future abuses by lenders.

Consumers seeking more information on the national settlement can 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.