Roughly $1 billion is expected to go to homeowners in Illinois who have been harmed by fraudulent foreclosure and mortgage servicing practices, Illinois Attorney Lisa Madigan said Wednesday.
The money will be used to offer principal reductions and refinancing options for borrowers who are underwater -- those who owe more on their home than what it's worth, she said.
"Please don't be ashamed. Please don't be embarrassed, scared, daunted. Don't put your head in the sand. There are programs out there and we want to do everything possible to let you know there are programs out there and get you the help you deserve," Madigan said during an appearance before the City Council's committee on housing and real estate.
The $1 billion is just a portion of the full $25 billion garnered in a settlement the U.S. Department of Justice and the U.S. Department of Housing and Urban Development worked out with some of the nation's largest banks.
Madigan said foreclosures that may not have been deserved are also set to be reviewed.
"People who have already lost their homes to foreclosure should know there is a very significant review process of improper foreclosures that's taking place at the federal level," she said.
The Attorney General is advising people to contact her office if they feel their homes have been inappropriately foreclosed upon. She also advised homeowners who are struggling to enlist the help of a housing counseling agency or legal aid lawyer.
"We have seen that people who work with advocates double their chances of being able to stay in their homes and get some sort of relief," she said.