Iowa AG: Settlement will help homeowners

DES MOINES, Iowa (AP) -- State Attorney General Tom Miller said Iowa will get $40 million from a settlement with mortgage giants, with the majority going directly to consumers.

Speaking at a news conference Tuesday, Miller estimated that $24 million of the money would go to consumers to help with loan modifications and to give payments to some people who lost their homes to foreclosures.

Officials haven't decided how to spend about $15 million that will go to the state.

"Ninety percent of this settlement will go directly to consumers and not through any state or federal office," said Miller. "That financial relief will benefit many Iowa homeowners who are now in t5rouble with their mortgage, and even many borrowers who have already gone through foreclosure and faced some sort of mortgage servicing abuse in the process."

Miller was a lead negotiator in the settlement talks. He urged Iowans who are having troubles with their mortgages to contact his office using the Iowa Mortgage Help Hotline.

The deal with the nation's five largest mortgage lenders, and Miller said his office has established a hotline to help consumers who have questions.

"This is a large and complicated settlement," said Miller. "I know many Iowans are struggling to figure out how they fit in."

Miller said Iowa borrowers would get $5.9 million in benefits from loan modification, and another $7.4 million would go to borrowers who lost their homes and encountered service abuse. Another $11.6 million would go to borrowers who are underwater — meaning they owe more than the value of their home — but are continuing to pay on their loan.

Miller said the state will get $15.3 million, and officials are currently discussion how to use that money. Options include paying for a mortgage hoitline, creating new counseling and legal services and implementing details of the settlement.The national settlement calls for the payment of $25 billion. Miller urged consumers to be patient.

"This settlement will take some time to implement, but it will be an enormous help to many homeowners across Iowa and across the country," said Miller.