Schuette Joins 40 AGs in Foreclosure Settlement to Help Housing Crisis

Michigan Attorney General Bill Schuette announced Michigan will join at least 40 other states in a multi-billion dollar nationwide settlement with five of the nation's largest banks/mortgage servicers in response to allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. Schuette said that Michigan residents will receive approximately a half-billion dollars, including a $101 million fund provided directly to the State of Michigan. The settlement is anticipated to be the second-largest financial recovery ever achieved for affected citizens by attorney general, with the 1998 Master Tobacco Settlement being the largest.

"States across America have worked hard to present a united front in the fight to help stabilize the housing market in the aftermath of harmful mortgage lending and foreclosure practices," said Schuette. "As a result, Michigan residents who were hit hard by this crisis will now receive assistance."

With the $101 million anticipated from the settlement coming directly to the State of Michigan via the legislature, Schuette proposes a Michigan Homeowner Protection Fund. Monies will be directed to six initiatives to ensure Michigan families, children and veterans affected by the foreclosure crisis receive the maximum benefit from the settlement funds.

• Foreclosure Counseling for Homeowners - $20 million
• Foreclosure Rescue Scam Restitution - $10 million
• Payments to Borrowers who Suffered Foreclosure - $35 million
• Veterans Assistance - $5 million
• Aid for Children made Homeless by Foreclosure - $25 million
• Michigan Attorney General Home Protection Unit -$6 million

"We can't go back in time to undo the impact of the foreclosure crisis in Michigan, but these funds will go a long way toward repairing the damage for Michigan families," said Schuette. "The Homeowner Protection Fund will provide much-needed counseling services, restitution for victims of foreclosure rescue scams, and assistance for homeless children and our veterans." Schuette noted he looks forward to working with the Michigan legislature to secure necessary appropriations for the fund.