If you or a loved one are starting down foreclosure or are in danger of default in Illinois, you may be in luck. The state just received $3 million from a suit against the nation's five largest mortgage banks—money it will use to fund mediation efforts. It will be using the money to help home-owning citizens who are in default or who may have fallen prey to predatory tactics.

The Lawsuit Against Mortgage Bankers

All 50 states' Attorneys General filed a joint suit against the five largest banks that offer mortgages: Citibank, Wells Fargo, Ally (formerly known as GMAC Inc.), JP Morgan Chase, and the infamous-for-attempted Wikileads Bank of America.

The suits claimed that the five banks engaged abuse and even downright fraud. Special attention was given to "robo-signing", the practice of having bank employees sign off on documents without properly verifying the information.

The lawsuit ended with a whopping $25 billion settlement against the banks.

$1 Billion for Illinois Homeowners

Illinois Attorney General Lisa Madigan announced that $1 billion dollars of the settlement would go towards aiding homeowners and former homeowners who fell victims to fraud and fraudulent practices.

The money will help pay off the principals on some home loans, and/or help refinance other loans, on "underwater" homes (i.e. homes that are worth less than what is owed on their mortgages).

$3 Million for Mediation Services

A sizable sum will help establish financial mediation programs in counties where none exist. The state's Attorney General said in a press release that mediation efforts help "give homeowners a fighting chance," increasing their chances restructuring their mortgages and keeping their homes much more than when mediation is not a factor.

$20 million will also help fund legal assistance programs, which is likely to include mediation attorney assistance.