Distressed homeowners welcome settlement

February 9, 2012 2:52:45 PM PST
Illinois homeowners facing foreclosure will get a share of the $25 billion settlement reached with some of the nation's biggest banks.

Sherri Norris says she's losing a three-year foreclosure fight for her Broadview condo. She hopes a new deal will help her move forward.

"I'm hoping and praying it's not too late," she said. "I'm just being prayerful."

On Thursday, several attorneys general announced a foreclosure settlement with some banks.

The settlement commits the banks to reduce mortgage principals, refinance underwater mortgages and cash payouts to some who lost their homes.

"Today we pick up another piece of the wreckage caused by the foreclosure crisis," Illinois Attorney General Lisa Madigan said.

Madigan and the other attorneys general were acknowledged by President Obama for their work creating the settlement to help some of those hurt by the foreclosure crisis.

"Today's settlement should serve as a warning to financial institutions that there are consequences for engaging in practices that jeopardize the stability of our communities and our economy," Madigan said.

Geoff Smith, executive director of the Depaul's Institute on Housing Studies, said he hopes the settlement brings relief to homeowners facing foreclosure. "If run effectively, it will help homeowners in distress but I don't think we can really expect it to kick start the market," he said.

As that settlement trickles down to homeowners, Norris is preparing for an eviction, moving out and staying with relatives.

"It's very scary because you don't' know when they are going to come and bring the sheriffs in and tell you to come and move out," Norris said. "You just take one day at a time. It's been very frustrating. (It) keeps you on pins and needles all the time."

Those eligible for help would have lost their homes between 2008 and 2011 and some of those who owe more on their home than its worth. Homeowners can contact their servicer to see if they are eligible.

A federal judge needs to sign off on the settlement, which is expected to take two weeks.

Illinois homeowners can call the attorney general's office at 866-544-7151 for more information on the foreclosure settlement.