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Madigan: Illinois homeowners receive $1.4 billion in assistance from national foreclosure settlement

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[February 22, 2013]  CHICAGO -- In responding to the third report issued by the national foreclosure settlement's independent compliance monitor, Attorney General Lisa Madigan on Thursday 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," said Madigan. "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."

Additional sources of assistance for Illinois homeowners

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:

LAF (Legal Assistance Foundation of Metropolitan Chicago)

Northern and western Illinois residents
(outside Chicago):

Prairie State Legal Services

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Southern Illinois residents:

Land of Lincoln Legal Assistance Foundation

Homeowners with questions about the national settlement can contact Madigan's Homeowner's Helpline at 866-544-7151 or visit
. For more information, borrowers also can visit

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 unsolicited 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.

[Text from file received from the office of Illinois Attorney General Lisa Madigan]

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