WisBusiness: Wisconsin could see $140M from multi-state foreclosure settlement
By Andy Szal
Gov. Scott Walker and Attorney General J.B. Van Hollen announced the state will receive an estimated $140 million from a $25 billion multi-state and federal settlement of a foreclosure lawsuit against the nation's five largest mortgage providers.
The largest portion of that funding -- about $60 million -- would go toward loan modifications and other relief for struggling homeowners. More than $31 million would go toward homeowners underwater on their mortgages, and $17 million would be allocated for $2,000 payments to eligible foreclosure victims between 2008 and 2011.
About $31.6 million was included for discretionary spending by the state, $25.6 million of which will go into the state's general fund, Walker said.
In addition to the monetary impact, Van Hollen said the five lenders would have to undergo "institutional changes," including going into mediation before initiating foreclosure proceedings.
"Now, the people really have a court order behind them," Van Hollen said of vulnerable homeowners.
Walker stressed that most of the money is directed toward individuals in the state, and that the funding would largely end up in Milwaukee, which had been hit hardest in the state by foreclosures.