Illinois to get $1 billion in mortgage settlement

Illinois Attorney General Lisa Madigan says Illinois will share in a $25 billion settlement over faulty mortgages. (Photo by Joshua Lott/Getty Images)

CHICAGO – Attorney General Lisa Madigan’s office says Illinois is expected to get $1 billion in a multi-state settlement with the nation’s five largest bank mortgage servicers.

Madigan’s office says she’ll join with attorneys general in other states and the federal government to announce the $25 billion settlement in Washington on Thursday.

The settlement involves allegations of widespread “robo-signing” of foreclosure documents and other fraudulent practices. Robo-signing is the practice of having employees sign papers they hadn’t read or using fake signatures to speed foreclosures.

Madigan’s office says the money will be used to help Illinois residents who’ve lost their homes, are at risk of defaulting on their mortgages or owe more than their homes are worth. The office says the settlement also will overhaul standards to prevent future abuses.