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Daily Real Estate News  |  May 10, 2011  |   Special Fund Would Help Owners Stay in Homes
State attorneys general are proposing a special fund, that could be as large as $20 billion, to help troubled borrowers stay in their homes.

State attorneys general are meeting this week in Washington, D.C., to continue negotiations with federal regulators and the country’s largest mortgage servicers. The settlement negotiations are expected to include talks about the special fund as state attorneys general continue to seek fines and other punishment of mortgage servicers for bad foreclosure practices.

Proposals from state attorneys general being discussed include using some of the money in the fund to write down the principal balance for some troubled home owners, The Washington Post reports. Banks have strongly argued against such a move, questioning the fairness for other home owners in doing that. Another option state attorneys general may propose is to use the funds to support state-run aid programs, mediation services, and foreclosure hotlines to help struggling home owners.

The ongoing negotiations are one of many taking place among government agencies to reach settlements with banks regarding shoddy foreclosure practices.

Source: “Talks Focus on Helping Mortgage Recipients,” The Washington Post (May 10, 2011)

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