Being one of the nation’s hardest hit markets in foreclosures, as many as 44 non-profits in Illinois have been given the responsibility of revitalizing many of Illinois most affected communities.
Illinois received $70 million as part of the national foreclosure settlement in February of 2012. This settlement was between the federal authorities and 5 of the most prominent lenders; Bank of America, Wells Forgo, JP Morgan-Chase, Citibank, and Ally Bank (GMAC); aka, “The Big Five.” This settlement for wrongful foreclosures resulted in $25 billion in reparations.
Illinois Attorney General, Lisa Madigan, delegated the responsibility of the allocation of these funds and told the press on Wednesday, July 17, 2013 that $70 million is what is remaining after $25 million was paid towards legal aid organizations and to structure foreclosure mediations programs.
Shaun Donavan, secretary of the U.S. Department of Housing and Urban Development, had only good things to say about Madigan’s execution of the funds, while other states have used their funding to rectify their budgets rather than the housing market.
44 Non-profits were selected out of 136 that applied requesting as much $507 million.
The Illinois Attorney General said, "The banks are held responsible for a lot of the destruction that they caused throughout Illinois and our country. It's appropriate that that money is coming from the banks.” She continued by saying, “The banks will never be able to do enough to clean up the mess they caused in our country."
$56 million has been given for community revitalization directly, which will be overseen by the Mac Arthur Foundation and the Chicago Community Trust. They are to make sure the funds are spent according what has been stipulated by the Attorney General. Other funds are allocated for housing counseling and for distressed renters and homeowners.
Another $6 million was given to the Cook County Land Bank, which not only purchases properties in communities that have an overwhelming amount of vacant and distressed property, but also rehabs and manages the properties as well.
The land bank originally asked for $15 million but Bridget Gainer, Cook County Commissioner said, “I'm thrilled with that amount. It's a big difference if someone has a $6 million budget.” She added that the boost to its budget will make the entity more viable.
Another entity in play is Illinois Facilities Fund (IFF), who has concentrated on purchasing single family homes and condos in Berwyn, Bellwood, Forest Park, Oak Park, and Maywood. Although they have currently purchased 24 properties with their portion of the fund and they are looking to add 15 more to that portfolio, their most recent challenge is being outbid by other investors.
Presently, Illinois homeowners have received up to $43 million in settlements, on top of the refi’s and modifications being offered. That $43 million is also separate from the $100 million Illinois is currently dispersing to these non-profits.
While this alone won’t make complete amends for all the damage to Illinois and Chicago real estate, it does help. One day in the near future, all of this will be a blip in the rearview mirror, but until then, homeowners are fortunate that Illinois received an allocation of funds.