 The funding provided by Madigan stems from her lead role in obtaining
a historic $25 billion national settlement last year with the
country'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
documents and other fraudulent practices by banks during foreclosure
proceedings.
With the announcement Wednesday, Madigan is dedicating $70
million in settlement funding toward relief efforts for Illinois
communities fraught with vacant and abandoned properties. The
funding seeks to help rebuild neighborhoods that have been hardest
hit by foreclosure. The help is to be provided in two critical ways:
by rebuilding and rehabilitating vacant and abandoned properties in
order to turn around blighted neighborhoods, and by providing
critical housing counseling to homeowners and renters in order to
build stable communities. Some resources were also dedicated to
housing policy and data experts who will ensure all the awardees
have access to vital information, tools and strategies for success.
"With these awards, we are making a down payment on a better
future for families in communities hardest hit by the foreclosure
crisis," Madigan said. "The work being done by these outstanding
organizations will help move us forward on the road to recovery."
The settlement has already provided nearly $2 billion in direct
relief through principal reductions on home loans and refinancing
for underwater loans to Illinois homeowners who were victims of the
banks' practices, and an additional $43 million in direct payments
to foreclosed borrowers. In addition, Madigan has awarded $20
million to legal aid organizations and $5 million to pilot mortgage
foreclosure mediation programs in Illinois.
"I applaud Attorney General Madigan's leadership and focus on
promoting resilient and sustainable collaborations through the
National Mortgage Servicing Settlement," said Shaun Donovan,
secretary of the U.S. Department of Housing and Urban Development.
"More specifically, Attorney General Madigan and her team's creative
use of this flexible funding source to help local leaders design
programs that will not only help Illinois communities today, but
will remain impactful long after this funding source is depleted.
Her dedication to use the funds allocated to Illinois for
foreclosure-related activities is highly commendable and will pay
dividends for years to come."
To allocate the $70 million in funding, Madigan appointed a
"blue-ribbon advisory council" made up of housing and community
development experts from Illinois' nonprofit, government and private
sectors to determine and recommend effective allocation of the
funding. The advisory council focused awards in areas of the state
that showed significant need, using data on foreclosed and vacant
homes in Illinois.
Members of the advisory council are Bennett P. Applegate, of
Applegate & Thorne-Thomsen and a founder of the Illinois Housing
Council; Allison Clark, of the John D. and Catherine T. MacArthur
Foundation; Robert Grossinger, of the Enterprise Community Partners
Inc.; King Harris, of Harris Holdings Inc. and the Metropolitan
Planning Council; Pam Daniels-Halisi, of The PrivateBank and Trust
Co.; Sharon Hess, of the Southern Illinois Coalition for the
Homeless; Juanita Irizarry, of The Chicago Community Trust; Roberto
Requejo, of the Federal Reserve Bank of Chicago; Antonio Riley, of
the U.S. Department of Housing and Urban Development; and Dawn
Stockmo, of the National Community Stabilization Trust. The advisory
council is assisted by Robin Snyderman and Karen Muchin.
The advisory council received 136 proposals seeking a total of
$507 million. Ultimately, the $70 million was awarded to 54
proposals that focused on areas of need and on housing initiatives
that have been nationally recognized by institutions as diverse as
the U.S. Department of Housing and Urban Development and the
Brookings Institution. Funding was awarded to groups of
organizations working collaboratively to ensure efforts are not
duplicated and are more effective -- allowing public and private
partners to reach a larger number of homeowners and renters in
neighborhoods across the state. Some resources were also dedicated
to housing policy and data experts to ensure the long-term viability
of the projects.
A snapshot of awards from the $70 million:
$6 million
to assist in the startup of the Cook County Land Bank, estimated
to be the largest land bank in the country, and support the
already existing South Suburban Land Bank. The two land banks
will support local municipalities in bringing vacant, abandoned
and foreclosed properties back to productive use -- boosting
local economies, benefiting area schools and reducing crime.
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Rock Island
Economic Growth Corp., Rock Island and surrounding counties:
$3.5 million to the Rock Island Economic Growth Corp., which is
made up of public and private entities, to coordinate housing
redevelopment strategies in Henry, Mercer, Rock Island and
Whiteside counties. The funding will support 83 new construction
or rehabbed properties for sale or rent, including some historic
preservation properties. Property management and social service
strategies will be implemented to prioritize veterans or special
needs populations.
-
IFF, formerly the
Illinois Facilities Fund, in suburban Cook County: $3
million to support the West Cook Housing Collaborative's
five-town redevelopment strategy, which prioritizes redeveloping
properties that are near public transportation and have been
affected by the foreclosure crisis. The funding will nearly
double the acquisition and rehab underway, enabling IFF to
create an additional 53 affordable homes for working families.
-
Local Initiatives
Support Corp., greater Peoria area: $3 million to fund
LISC's new effort to bring local housing stakeholders together
to create a new, unified vision for revitalization. The funding
will support the demolition of 20 buildings and create 30 new
homes -- half of which will be for rental properties for the
special needs population and half for sale -- to revitalize
Peoria's East Bluff neighborhood.
-
Community
Foundation of the Fox River Valley, DuPage and Kane counties:
$3 million to redevelop properties in these collar counties,
including properties in Aurora, Batavia, Carpentersville, Elgin,
North Aurora and St. Charles. The funding will initiate a
regional revitalization strategy called the Homes for Changing
Region Plan, which will promote long-term neighborhood stability
in those areas.
-
Hispanic Housing
Development Corp., Chicago: $3 million to fund an
unprecedented effort to rehabilitate and convert single-family
homes in foreclosure into rental properties. The program will
allow struggling homeowners and their families who are currently
in foreclosure to stay in their homes as renters.
Combating the housing crisis on many fronts
Throughout the housing crisis, Madigan has taken actions to hold
the country's biggest mortgage lenders accountable for unlawful
misconduct. Last year, Madigan became the only state attorney
general to bring and resolve a fair lending lawsuit against a
national bank when she and the U.S. Department of Justice reached a
$175 million settlement with Wells Fargo over discriminatory lending
practices. In 2011, Madigan and the U.S. Department of Justice
reached a $335 million settlement to resolve allegations that
Countrywide -- now owned by Bank of America -- employed similar
discriminatory lending practices against minority borrowers. That
settlement represented the largest fair lending settlement in the
nation's history.
Madigan led an earlier lawsuit against Countrywide that brought
about a national $8.7 billion settlement in 2008 regarding the
company's predatory lending practices, and she reached a $39.5
million settlement with Wells Fargo over the bank's deceptive
marketing of extremely risky loans called pay-option ARMs. Madigan
has also filed a consumer fraud lawsuit against Standard & Poor's,
alleging the ratings agency compromised its independence by
assigning high ratings to unworthy, risky investments as a corporate
strategy to increase its revenue and market share.
For more information on the national foreclosure settlement that
led to the announcement Wednesday, visit
www.illinoisattorneygeneral.gov/consumers/
bankforeclosuresettlement.html. Borrowers also can visit
www.nationalforeclosuresettlement.com.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan]
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