Grant applications for mortgage settlement exceeding amount available

Seven organizations have submitted applications to the Indiana Bar Foundation requesting just over $1 million in grants to help repair the damage from the housing crisis.

The applicants are filing for a portion of the multi-billion dollar settlement worked out between the U.S. Department of Justice and Bank of America. Part of the settlement funds were directed into the Interest on Lawyers’ Trust Account programs around the country and designated to go toward assisting homeowners with mortgage foreclosure issues and community redevelopment.
 
Indiana received just under $600,000 and the Indiana Bar Foundation, which administers IOLTA monies, established a grant program to award the funds. Applications for grants were submitted by legal aid agencies and pro bono districts around the state, according to Chuck Dunlap, executive director of the IBF. The requests for funding exceeded the amount available by more than $400,000.

“I wish we had more money,” Dunlap said.

Now, the IBF’s Grants, Awards and Scholarship Committee, chaired by Indiana Court of Appeals Judge Melissa May, is reviewing the applications and will make recommendations as to the recipients and award amounts.

The Indiana Bar Foundation is tentatively planning to announce the recipients during its 65th anniversary benefit dinner Nov. 6.

Also, Dunlap’s wish for additional funds might come true.

The Bank of America settlement agreement included a provision that would allocate another $400 million to offset the tax liability homeowners can face when they get mortgage relief. In the past, Congress has passed legislation to suspend that tax.

If the Congress again erases the tax penalty in 2015, about 75 percent of the additional money will be released to IOLTA. This could bring $6 million to $8 million more to Indiana to spend on foreclosures and community redevelopment projects, Dunlap said.