Indiana Attorney General Greg Zoeller announced Wednesday that funds from a multi-million dollar mortgage lending settlement will benefit low-income homeowners who need help with utility bills.
House Bill 1141, signed by Gov. Mitch Daniels March 14, creates a fund for deposit of $28.8 million arising from a multistate settlement with five major mortgage lending banks. The banks – Ally, Bank of America, Citi, JPMorgan Chase and Wells Fargo – were found to have engaged in unacceptable mortgage-servicing practices and foreclosure abuses.
“Low-income homeowners who were most at-risk to be foreclosed upon are also the most likely to have difficulty paying electric and gas bills and face disconnection,” Zoeller said. “The mortgage lending institutions that preyed upon borrowers and engaged in illegal practices are paying millions of dollars in settlement money to Indiana, and the Legislature wisely channeled this flow of dollars into a fund where at-risk homeowners can be helped.”
Eligible homeowners already qualify for the federal Low Income Home Energy Assistance Block Grant program or LIHEAP. The program is operated through community action agencies with outreach offices in every county. In 2011, Indiana’s LIHEAP provided 197,809 households with an average benefit of $420 each for assistance with utilities
Under the compromise version of HB 1141 that passed, the amount of state energy assistance created through the settlement will match the amount of 7 percent sales tax that LIHEAP recipients pay on their energy bills through that federal program. The dollars the state provides will offset the taxable amount, boosting funds available for low-income homeowners. That means more homeowners will be eligible for energy assistance, and those who qualify might qualify for larger amounts than they would have previously. Zoeller said the Indiana Housing and Community Development Authority, administered by the Lieutenant Governor’s Office, will determine how the settlement funds will be distributed to help recipients.