Foreclosure Deal Aids States

States have discretion in spending their $2.7 bln share of settlement.

Wisconsin plans to use part of its $140 million share of the national foreclosure settlement to fill a budget hole. Missouri would devote $40 million for education. Ohio wants to tear down vacant homes.

Ninety percent of the $25 billion settlement announced Feb. 9 goes to borrowers, with states receiving at least $2.66 billion, said Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, who helped negotiate the deal. The money for states is to “help fund consumer protection and state foreclosure-protection efforts,” according to the National Mortgage Settlement website, though states have discretion in spending, and their tax bases and budgets were hurt by the housing crash, Greenwood said in an e-mail.

Helping the Poor

“The best use of that money would be to restructure loans,” said Molly Rogers, staff attorney with Austin-based Texas Rio Grande Legal Aid Inc., which assists poor residents in 68 South Texas counties. “A good chunk of this money should go to appropriate organizations who can help borrowers.”

Destroying the Village

At least 100,000 homes need to be demolished, DeWine said, and he is establishing a program to match funds that cities and land banks allocate for tearing down houses.

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