Underwater Indiana homeowners will receive about $43 million in refinanced loans while other borrowers will get $30 million worth of loan-term modifications and other relief as part of a $25 billion nationwide settlement with the country's biggest mortgage lenders, Indiana Attorney General Greg Zoeller said Thursday.
The deal mends foreclosure abuses that occurred after the housing bubble burst, and requires five of the largest banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial — to reduce loans for about 1 million households at risk of foreclosure and send checks to about 750,000 Americans who were improperly foreclosed upon.
As many as 13,000 Indiana borrowers whose homes were improperly foreclosed upon from 2008 through the end of last year will receive checks of $2,000 under the settlement with the federal government and 49 states, Zoeller said.
Overall, $97 million of Indiana's $145 million share of the deal goes directly to Indiana borrowers. The attorney general's office will receive a direct payment of about $45 million to fund consumer protection, state foreclosure prevention efforts and related programs, Zoeller said. Indiana's Department of Financial Institutions will receive an estimated $1 million.
The banks will have three years to fulfill the terms of the deal, which is subject to final approval by a federal judge.
"This resolution, while not everything we had wanted, speeds help to Hoosiers and for the economy as a whole," Zoeller said.
Loans owned by Fannie Mae or Freddie Mac are not affected by the settlement, which is the biggest involving a single industry since a 1998 multistate tobacco deal.