In August of 2014, Bank of America forged a mortgage settlement with six
states and the U.S. Department of Justice. Eric D. Green, who served as
independent Monitor of the settlement, announced in March 2016 that $13,037,872
would be distributed to the Lawyers Trust Fund of Illinois. Mandated by
the terms of the agreement, this sum is meant to help bankroll the legal
assistance necessary for community development and the prevention of foreclosure.
With its base of operations located in Chicago, the Lawyers Trust Fund
is among the fifty-six legal assistance programs that will receive remuneration
under the settlement. The settlement arises from a mortgage-related claim
against Bank of America. NeighborWorks America, a nonprofit organization
that focuses on community redevelopment projects in the United States
and Puerto Rico, already received an earlier distribution under the terms
of the settlement.
The distribution was set off by President Obama’s signing of legislation,
which extended federal tax relief for homeowners through 2016. The act
applies to borrowers that would otherwise have accumulated tax liability
for the forgiveness of their mortgage debt. The settlement distribution
totals more than $490 million nationwide and is being distributed to applicable
nonprofit organizations from a tax-relief fund established by the agreement.
However, once the act was signed into law, the money set aside in the tax-relief
fund was reclassified as surplus. As dictated by the settlement, a quarter
of the funds must be distributed to NeighborWorks America, while the remaining
seventy-five percent will be given to eligible nonprofit legal-assistance
organizations across the nation.
According to the settlement terms, every state, the District of Columbia,
and every U.S. possession or territory are to receive a $200,000 payment.
The remaining amount is to be distributed according to applicable census
population data. The organizations must either be an Interest on Lawyers
Trust Account organization (IOLTA) or one associated with the state bar
association or an associated group that funds legal aid in their area,
to qualify as an organization eligible for the distributions.
The distributions are scheduled to continue regularly, and will carry on
as the recipient organizations to complete the necessary documentation
and receive the distributions.
If you would like more information on this topic, please contact Dennis
Baranowski, Esq. or call our main office at (949) 298-8050.