INDIANAPOLIS (WISH) - It's $26 billion and its all part of the new mortgage settlement announced by the federal government Thursday.
Ally/GMAC, CitiMortgage, JPMorgan Chase, Wells Fargo and Bank of America will help up to 2 million people who have been foreclosed upon or are underwater on their mortgage.
Indiana, which was hit hard in the housing crisis, will take part in the settlement, along with 48 other states.
"It's been devastating to watch what's happened to families in this market ... many of which have done everything right," said Realtor Kim Alexander, owner of Keller Williams in Carmel and Fishers.
Around 13,000 Hoosiers inappropriately forced into foreclosure could get an $1,800 check from the government, all part of the mortgage settlement.
"It's not the same as not having lost your home at all, but at least it's some compensation for that," said Abby Kuzma, director of consumer protection with the Indiana attorney general's office.
Indiana will be getting $145 million split up in four parts: $30 million will be spent on home loan modifications; about 13,000 people will get a check in the mail if they inappropriately lost their home to foreclosure; people underwater on their loans will be able to refinance their mortgage; and $45 million will be put aside for state foreclosure prevention efforts.
"Homeowners who are not delinquent in the past haven't had an option. This provides a special program for refinancing of homes particularly that are underwater, which is one of the biggest problems in Indiana," Kuzma said.
Alexander said the Indiana housing market is starting to look up. Just one year ago it took on average more than a year to sell a house. Now that time is down to around nine months. Alexander said she hopes the federal help will not only help homeowners upside down on their mortgages, but also their neighbors.
"Anything that helps homeowners deal with shortcomings as far as appreciation or the ability to move is going to be a good thing in the market," she said.
Under the federal program, the banks need to reach out those who qualify within six to nine months, and everyone involved should receive help within three years.
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