Philadelphia sues Wells Fargo over discriminatory lending

Cites recent Supreme Court decision that gave cities right to sue lenders

Scales of justice with gavel

Earlier this month, the Supreme Court ruled that cities have the right to sue banks over discriminatory mortgage lending practices, but the ruling established a standard that might be tough for the city in question to prove.

Now, one city is going to put that standard to the test.

The city of Philadelphia announced Monday that it is suing Wells Fargo for alleged discriminatory lending practices against minority borrowers.

Philadelphia’s announcement specifically cites the recent Supreme Court decision, which stemmed from a lawsuit brought by city of Miami against Bank of AmericaCitigroup, and Wells Fargo in 2013.

In its lawsuit, Miami claimed that the banks engaged in predatory lending to minority borrowers in the city, and accused the lenders of “reverse redlining,” which led to a large number of foreclosures, lower property tax collections, and increased cost to the city to deal with the resulting property value loss and blight.

The Supreme Court ruling granted cities the right to sue banks under the Fair Housing Act, but established that the city must prove direct harm to itself caused by the lender’s actions.

Philadelphia is taking that challenge head-on.

According to the city’s announcement, its complaint alleges that beginning in 2004 through today, Wells Fargo violated the FHA by “steering African-American and Latino borrowers towards high-cost or high-risk loans even where those borrowers’ credit permitted them to obtain more advantageous loans.”

Philadelphia’s complaint also alleges that Wells Fargo was “aware and, in fact, incentivized the marketing of the high-cost or high-risk loans to minorities.”

According to the city, the incentivized loans included “lender credit” loans, in which Wells Fargo pays the borrower’s closing costs in exchange for receiving a loan with a higher interest rate.

Then, the borrower has to pay the higher interest rate well after the “lender credits” are repaid, which generates additional revenue for the bank with no additional benefits for the borrower, the city claims.

According to the city, its lawsuit is based on a review of Wells Fargo’s lending practices, the city’s applicable legal authority, and an analysis of available loan data by the city legal counsel.

The city claims that that analysis found that 23.3% of loans Wells Fargo made to minority customers in Philadelphia were “high-cost or high-risk,” while only 7.6% of loans made to white customers were “high-cost or high-risk.”

Additionally, the city’s lawsuit claims that Wells Fargo’s lending practices have a “disparate impact” on minority borrowers in Philadelphia, including (claims direct from the city’s announcement):

  • A loan in a predominantly minority neighborhood is 4.7 times more likely to result in foreclosure than is a loan in a predominantly white neighborhood
  • African-American Wells Fargo borrowers were 2.1 times more likely to receive a high-cost or high-risk loan than a white borrower
  • Latino borrowers were 1.6 times more likely to receive a high-cost or high-risk loan than a white borrower
  • The disparity remained even among borrowers with FICO credit scores above 660 as African-Americans with FICO scores greater than 660 were 2.5 times more likely to receive a high-cost or high-risk loan than a white borrower and Latino borrowers with FICO scores greater than 660 were 2.1 times more likely to receive a high-cost or high-risk loan than a white borrower

“The practices of Wells Fargo disproportionately affected minority borrowers here in Philadelphia, and because many of these loans resulted in foreclosures, all neighborhoods throughout the city suffered the harm,” Philadelphia Mayor Jim Kenney said.

“I am proud that the city is committed to fighting against practices that unfairly impact its minority population and have drained resources from all Philadelphia neighborhoods,” Kenney continued. “And I particularly thank members of City Council who have long battled predatory lending in their districts and across the entire city.”

Wells Fargo, for its part, denies the city’s allegations and says it intends to fight the charges.

“The city’s unsubstantiated accusations against Wells Fargo do not reflect how we operate in Philadelphia and all of the communities we serve,” a Wells Fargo spokesperson said in a statement to HousingWire.

“The U.S. Supreme Court’s recent ruling in the city of Miami case means that, for Fair Housing Act claims, financial institutions cannot be held responsible for harm they didn’t cause,” the spokesperson continued.

“These types of cases have been pending in other states and have been rejected by all courts who have addressed the merits of the claims,” the spokesperson added.

“Wells Fargo has been a part of the Philadelphia community for more than 140 years and we will vigorously defend our record as a fair and responsible lender,” the spokesperson concluded. “We will continue to focus on helping customers in Philadelphia and its surrounding communities succeed financially, and on expanding homeownership in Pennsylvania and across the United States.”

The city said that its complaint is seeking “equitable relief,” which could include an injunction requiring Wells Fargo to stop engaging in discriminatory lending practices.

The city is also seeking monetary damages based on the city’s loss of property tax revenue resulting from unpaid taxes on abandoned properties, along with the reduction in tax collections due to the decrease in value of foreclosed properties and properties in proximity to foreclosures.

Philadelphia will also seek compensation for non-economic injuries associated with foreclosures, such as interference with the city’s ability to achieve its goals for non-discriminatory housing practices, the city said.

“The city of Philadelphia’s investigation revealed that both the resources of the city and the lives of Philadelphia’s citizens have been negatively affected by Wells Fargo’s discriminatory lending practices,” said Philadelphia City Solicitor Sozi Pedro Tulante. “The Law Department must take action in light of this evidence and halt these discriminatory practices on behalf of the citizens of Philadelphia.”

Wells Fargo to Pay up to $50,000 per person in bias case against blacks, Hispanics

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Editor’s Notes:  

The point here, besides the obvious bias, is that they were targeting people who were unsophisticated and if it all possible had language problems. Why would they go to so much trouble to find hapless people who are not going to be able to pay for the loans? ANSWER: Because every time a loan fails it gives them another opportunity to make even more money than they did before. Since they were playing with investor money, the risk of loss was not factored in making the loans.

Remember that in Florida alone it was discovered than more than 10,000 people were newly licensed mortgage brokers, each of whom was a convicted felon for economic crimes. They needed people who would say anything to close the deal, NOT people who were looking out for the bank or its depositors because there were no depositors in most cases and even when a depository institution initiated the loan origination, they were not using their own money or credit. Nobody after that EVER paid one cent for any of the transfers, assignments, indorsements, or allonges. All the transactions were fake descriptions of transactions that never occurred.

And they are STILL trading on the bad loans even if they were long ago “foreclosed” and even if there was an eviction. They are trading the synthetic derivatives that were based upon the derivatives whose value was derived from the mortgage bonds whose value was derived from the home. All the trades are bogus. While all Americans suffer, the banks continue to generate “profits” that don’t actually exist because they are more than offset by an unstated liability for selling “forward” an asset that they know they never had and which has been lost through the foreclosure.

Nobody in mainstream media has YET picked up on this because of its obvious complexity. But when they, do, all hell will break loose. It will be discovered that the original loan was paid in full at the moment of origination and that all trades after the fake transaction used as the basis of the contents of the “closing documents” were faked, which is why they couldn’t come up with real documents and were submitting fabricated, robo-signed, surrogate signed, forged documents and recording them.

And that is the tip of the iceberg on the degree of corruption of our title system. Because all those trades, foreclosures and evictions can and should be reversed. And the economic collapse should and would be restored to normal economic activity with the wealth back where it belongs — in the hands of people who were cheated, deceived and discriminated against by the banks.

Justice Dept: Wells Fargo to pay $175M to settle allegations of bias against blacks, Hispanics

WASHINGTON — Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.

Wells Fargo, the nation’s largest residential home mortgage originator, allegedly engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers from 2004 through 2009.

At a news conference, Deputy Attorney General James Cole said the bank’s discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.

Cole said that with the settlement, the second largest of its kind in history, the government will ensure that borrowers hit hard by the housing crisis will have an opportunity to access homeownership.

The bank will pay $125 million in compensation for borrowers who were steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin rather than because of differences in credit-worthiness.

Wells Fargo also will pay $50 million in direct down payment assistance to borrowers in areas of the country where the Justice Department identified large number of discrimination victims. Those areas are Washington, D.C., Chicago, Philadelphia, Oakland and San Francisco, New York City, Cleveland, Riverside, Calif., and Baltimore.

“The department’s action makes clear that we will hold financial institutions accountable, including some of the nation’s largest, for lending discrimination,” Cole said.

The settlement will bring “swift and meaningful relief” to African-American and Hispanic borrowers who received subprime loans when they should have received prime loans or who paid more for their loans, said Thomas Perez, assistant attorney general for the Justice Department’s civil rights division.

Perez said that because of the bank’s practices “an African-American wholesale customer in the Chicago area in 2007 seeking a $300,000 loan paid on average $2,937 more in fees than a similarly qualified white applicant. And these fees were not based on any objective factors relating to credit risk. These fees amounted to a racial surtax. A Latino borrower in the Miami area in 2007 seeking a $300,000 paid on average $2,538 more than a similarly qualified white applicant. The racial surtax for African Americans in Miami in 2007 was $3,657.”

Wells Fargo noted in a statement that it has denied the claims.

“Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ,” it said, “and to instead devote its resources to continuing to provide fair credit services and choices to eligible customers and important and meaningful assistance to borrowers in distressed U.S. real estate markets.”

The part of the settlement for $125 million deals with mortgages that were priced and sold by independent mortgage brokers through Wells Fargo’s wholesale channel. The financial institution said that it is discontinuing financing mortgages that are originated, priced and sold by independent mortgage brokers through the mortgage wholesale channel.

“Through our separate decision to no longer fund mortgages through independent mortgage brokers, we can control how that commitment” to serving home ownership needs “is met on every mortgage that Wells Fargo makes,” said Mike Heid, president of Wells Fargo Home Mortgage.





Philadelphia Gives Homeowners a Way to Stay Put

The real story with real solutions or at least partial solutions. Sheriff Green started all this. Bravo. Now start thinking of all the profits, transfers and records that should have been reported, filed and taxed and the state budget problems will be over.

November 18, 2009

Philadelphia Gives Homeowners a Way to Stay Put

PHILADELPHIA — Christopher Hall stepped tentatively through the entranceway of City Hall Courtroom 676 and took his place among dozens of others confronting foreclosure purgatory. His hopes all but extinguished, he fully expected the morning to end with a final indignity: He would sign over the deed to his house — his grandfather’s two-story row house; the only house in which he had ever lived; the house where he had raised three children.

“This is devastating,” he said last month as he sat in the gallery awaiting his hearing. “This is my childhood home. I grew up there. My mother passed away there. My grandfather passed away there. All of my memories are there.”

A union roofer, Mr. Hall, 42, had not worked since August 2008, when the contractor that employed him as a foreman went broke and laid off more than 40 people. He had not made a mortgage payment in more than a year, and his lender, Bank of America, was threatening to auction off his house through the sheriff’s office.

In most American cities, that probably would have been the end of the story: another home turned into distressed bank inventory by the national foreclosure crisis. But in Philadelphia, under a program begun last year to try to keep people in their homes, Mr. Hall entered the courtroom with a reasonable chance of hanging on.

Under the rules adopted by Philadelphia’s primary civil court, no owner-occupied house may be foreclosed on and sold by the sheriff’s office before a “conciliation conference,” a face-to-face meeting between the homeowner and the lender aimed at striking a workable compromise. Every homeowner facing a default filing is furnished with counseling, and sometimes legal representation.

So, as Mr. Hall stepped into the ornate courtroom just after 9 o’clock, he was swiftly provided with a volunteer lawyer, Kristine A. Phillips. She huddled briefly with a lawyer for Bank of America and returned with a useful promise. The bank would leave him alone for six more weeks while his housing counselor pursued further negotiations in an attempt to lower his payments permanently.

“You’ve got more time,” Ms. Phillips told him. “We’ll get this all worked out,” she said.

“Thank you so much,” Mr. Hall said softly, his body shaking with pent-up anxiety now tinged with relief. “It’s a lot of weight off of my shoulders.”

In a nation confronting a still-gathering crisis of foreclosure, Philadelphia’s program has emerged as a model that has enabled hundreds of troubled borrowers to retain their homes. Other cities, from Pittsburgh to Chicago to Louisville, have examined the program and adopted similar efforts.

“It brings the mortgage holder and the lender to the table,” said City Councilor John M. Tobin Jr. of Boston, who is planning to introduce legislation to enact a program in his city modeled on Philadelphia’s. “When people are face to face, it can be pretty disarming.”

When homeowners in Philadelphia receive legal default notices from their mortgage companies, the court system schedules a conciliation hearing. Canvassers working for local nonprofit agencies visit foreclosed homeowners, distributing fliers that inform them of their rights to a conference, and urging them to call a hot line that can direct them to free housing counselors.

“You can feel a certain sense of relief from their just being able to speak to someone about the program,” said Anna Hargrove, who works as a canvasser in West Philadelphia.

Every Thursday morning, the courtroom on the sixth floor of the regal City Hall here is given over to the conciliation conferences. It fills up with volunteer lawyers in jogging shoes, who are representing homeowners; gray-suited corporate lawyers working for mortgage companies; and all variety of delinquent borrowers — elderly citizens leaning on canes, construction workers in coveralls, parents with bored children in tow. The lawyers exchange preliminary settlement terms, while the homeowners fill out papers and wait.

In some cases, deals are struck that lower monthly payments for borrowers and allow them to retain their homes. When a homeowner cannot afford the home even at modified terms, the program helps to create a graceful exit, in which the borrower accepts cash for vacating the property or signs over the deed in lieu of further payment.

Those outcomes are similar to the ones produced by the Obama administration’s $75 billion program aimed at stemming foreclosures, which gives cash subsidies to mortgage companies as an inducement to accept lower payments. But in Philadelphia there is one crucial difference: the mortgage companies have no choice but to participate. They have to attend the conferences and negotiate in good faith or they cannot proceed with a sheriff’s sale.

Since the administration’s program was begun in March, it has been plagued by complaints of bureaucratic confusion and the indifference of mortgage companies. Many homeowners who have applied for loan modifications complain that their documents have been lost repeatedly or that they have been rejected without explanation.

Right to Mediation

The Philadelphia program forces an outcome by bringing together all the principals in one room. If the mortgage company proves intractable, the homeowner has the right to request mediation in front of a volunteer lawyer serving as a provisional judge, who relays recommendations to the program’s supervising judge. If the judge finds that the mortgage company is not acting in good faith, she can hold the house in limbo by denying permission for a sheriff’s sale.

While data is scant, a legal aid group, Philadelphia Volunteers for the Indigent Program, has complete information on 61 of the 309 cases it has resolved since October 2008 through the anti-foreclosure program. Only five resulted in sheriff’s sales, while 35 ended with loan modifications that lowered payments, the group says. The remaining 21 cases were divided among bankruptcies, loan forbearance and repayment arrangements, graceful exits and straightforward sales.

Some suggest the city’s program is plagued by the same basic defect as the Obama rescue plan: Nearly all the loans that have been modified have been altered on a trial basis, requiring homeowners to reapply for an extension of the terms after only a few months — a process that appears rife with obstacles, according to participants.

“There’s no teeth to the conciliation program,” said Matthew B. Weisberg, a Philadelphia lawyer who represents homeowners in cases involving alleged mortgage fraud. “It’s a largely ineffective stopgap prolonging what appears to be the inevitable, which is the loss of homes.”

Still, Mr. Weisberg grudgingly praised the plan.

“It’s arbitrary and unpredictable,” he said, “but it’s better than what anybody else is doing.”

Sheriff Delays Auction


Philadelphia’s Residential Mortgage Foreclosure Diversion Pilot Program began with a resolution passed by the City Council in March 2008, calling on Sheriff John D. Green to scrap the sheriff’s sale scheduled for April. Low-income neighborhoods were already experiencing a surge of foreclosures involving subprime loans given to people with tainted credit. With unemployment growing, lost paychecks were now pushing people into delinquency, reaching into middle-class and even wealthy neighborhoods. In early 2008, nearly 200 homes a month were being auctioned by the sheriff’s office, about one-third more than in 2006.

In West Philadelphia, Councilman Curtis Jones Jr., one of the sponsors of the resolution, watched his childhood neighborhood consumed by foreclosure, as the homes of working families — their porches once lined with flower pots — were boarded up with plywood.

“It becomes a blight on your entire community,” Mr. Jones said. “It creates an environment that fosters everything bad, from prostitution to drug dealing to wildlife, like raccoons taking over whole houses. One house becomes 10, and 10 becomes the whole block.”

In response to the resolution, Sheriff Green canceled the April sale. Meanwhile, Judge Annette M. Rizzo, who oversaw a local task force on stemming foreclosures, joined with the president judge of Philadelphia’s Court of Common Pleas to develop the program.

For Judge Rizzo, a high-energy woman who has long taken an interest in housing policy, the moratorium presented both a crisis and an opportunity. The sheriff was effectively refusing to fulfill his mandated responsibilities, leaving his office vulnerable to legal challenge. But if the mortgage companies could be persuaded to participate in an alternative way of addressing foreclosures, more people could stay in their homes.

“I realized we’re either going to go down in flames or we’re going to be a national model,” Judge Rizzo said. “We’re going to look at these cases and see what we can work out.”

Mr. Hall knew none of this. What he knew was that his life seemed to be unraveling.

Home to Four Generations

Ever since he was a teenager, he had earned a middle-class living with his hands. He had been raised by his grandfather in his three-bedroom house on Akron Street, in a predominantly Irish Catholic working-class neighborhood in Northeast Philadelphia.

He had attended St. Martin’s, the Catholic school around the corner, married his childhood sweetheart and still remained in his grandfather’s house, sending his own children — two boys (now in their 20s) and a 12-year-old girl — to the same school.

Mr. Hall, a soft-spoken yet intense man with a silver-tinged goatee, had worked seven days a week for much of this decade, bringing home weekly pay of about $1,000 — enough to build a deck in his backyard; enough to obtain a fixed-rate mortgage and buy the house for $44,000 when his grandfather succumbed to Alzheimer’s disease in the mid-1990s; enough for a motorcycle and a boat.

But three years ago, Mr. Hall committed the sort of mistake that has upended millions of households. At the recommendation of a for-profit credit counselor, he took out a new mortgage — a variable-rate loan from Countrywide Financial, which is now owned by Bank of America. He paid off some credit card debt, and he borrowed an extra $15,000 to renovate his home, expanding his mortgage balance to $63,000.

The loan began with manageable payments of about $500 a month. But Mr. Hall’s interest rate soon soared — something he says was never explained to him — lifting his payments to $950 a month.

“When I got the mortgage, I didn’t really understand it,” he said. “They told me this would improve my credit and that was it. It was just, ‘sign here,’ and ‘initial here.’ ”

No More Construction Work

He might still have managed had construction not come to a halt. By 2007, Mr. Hall’s employer was cutting work hours. In August 2008, it shut down, turning his $1,000 weekly paycheck into an $800 monthly unemployment check.

Every day, he set the alarm clock and headed to the union hall at 5 a.m., waiting and hoping for work. Every day, he went home, still jobless and discouraged, now confronting the displeasure of his wife, who worked as a nurse, and who he said never came to terms with their diminished spending power. After months of bickering, she left him last December, taking their daughter.

“She was saying, ‘How are we going to have Christmas? How are we going to go on vacation?’ ” he recalled. “She just seen it getting worse instead of better, and she got depressed.”

In January, his truck was repossessed, leaving him to walk through the winter dawn to the union hall for his daily ritual of defeat.

He watched the For Sale signs proliferating on his block, as mostly elderly neighbors found themselves unable to make their mortgage payments. He saw their belongings piled up on their front lawns as they abandoned their homes to foreclosure.

In September, the envelope finally landed with his default notice. A canvasser knocked on his door, proffering a flier urging him to call the city hot line. When he called, a housing counselor helped him assemble the paperwork for a loan modification and prepare for his conciliation conference.

When he arrived inside courtroom 676 in October, Mr. Hall carried a sheaf of wrinkled papers in a white plastic grocery bag. He occupied a solid wooden chair as an announcer called off cases for hearing. “Number 27, Wachovia Mortgage versus … .” A girl no older than 6, with flower-shaped plastic barrettes in her hair, fidgeted as her mother applied for legal representation.

Mr. Hall was struggling to come to terms with what he assumed was the end.

“I put my whole life into this house,” he said. “After I do all this work, they want to take it from me. You’ve got to regroup and move, but where? If I can’t pay my mortgage, how am I going to pay rent? And I have a whole house full of furniture.”

When he got the news that he had a few weeks’ reprieve, relief quickly gave way to the worry that had dominated his thoughts for months.

“It’s postponing the inevitable,” he said.

“I’m a man,” he kept saying, trying to make sense of how a lifetime of working on other people’s homes had put him here, staring at the potential loss of his own home; still hoping for relief.

“I don’t want no handouts,” he said. “I just want a reasonable loan that I can afford to pay so I can get on with my life.”

Mortgage Meltdown: State and Local Action Could Save Everyone


  • By slowing down the progression of foreclosures in the courts, judicial sales and bankruptcies, states can effectively bring the fall of housing to a point of equilibrium where at least the opportunity will arise for recovery. It is distinctly possible, particularly with the effect of inflation and devaluation of the dollar, that the numbers can work out even without a strong market. 
  • Borrowers, lenders, investment bankers and owners of CMOs might breathe a sigh of relief in a few years if they cooperate in these procedural mechanisms designed to slow down foreclosures. Kudos to Philadelphia Sheriff John Green who took the stand. That’s not just politics, it is courage. 
  • And it’s not socialism, it is reality: those people who would oppose these measures are arguing against their own interests. These measures are what Government is for — to step in and NOT let the the fabric of society get ripped apart and by the way, to prevent the precipitous decline in YOUR equity in YOUR home even though YOU are not in foreclosure. Do you really think that this mortgage meltdown is not going to cost YOU?
Philadelphia suspends sales of foreclosed homes (more socialism will fix it).

Reuters ^ | March 28th, 2008 | Jon Hurdle 

Posted on March 31, 2008 6:50:08 AM MST by 2banana

PHILADELPHIA (Reuters) – Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments — potential relief for tens of thousands of struggling debtors.

Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.

His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.

Philadelphia becomes the first U.S. city to halt foreclosure sales in the current crisis, although Cleveland and Baltimore are considering similar measures, said ACORN, an advocacy group for low-income families.

The group said 45,470 subprime foreclosures are expected in Pennsylvania between the third quarter of 2007 and the end of 2009.

Green, the sheriff of Philadelphia city and county, is trying to identify and track homeowners with weak credit histories who took out the loans with initially low repayments but who are no longer able to afford them because their rates have adjusted sharply higher.

Such loans are expected to lead to a flood of foreclosures throughout the United States this year, and have led to severe losses among financial firms trading in securities backed by the mortgages. ACORN estimates 2.2 million mortgage loans will go into foreclosure in 2008 due to the subprime crisis.

“Given the severity and complexity of mortgage foreclosures, a moratorium will allow for more time to identify and help distressed home owners,” Green said in a statement.

  • There is a most interesting by-product of all this is that the refusal of the Federal Government to get involved in the remedy to a problem that was created by intentional non-regulation and non-enforcement at the Federal level: 
  • States are rediscovering their power, their rights and their obligations. The fact is that the Federal government cannot be be trusted (or at least IS not trusted) by most participants in the mortgage meltdown. 
  • The unintended consequence of the mortgage meltdown, which adds to the Katrina fall-out is that states will take action on their own and that they might form regional unions through agreements that will look very much like treaties between sovereign nations.



States Tackle Foreclosures In Absence of Federal Help

By Dina ElBoghdady and Renae Merle
Washington Post Staff Writers
Wednesday, April 16, 2008; A01


This month alone, Philadelphia‘s sheriff delayed foreclosure auctions of 759 homes at the city council’s urging. Maryland extended the time it takes to complete a foreclosure. State leaders in Ohio recruited more than 1,000 lawyers to aid distressed borrowers.

Frustrated by the slow pace of federal action on behalf of struggling homeowners, some states and cities have struck out on their own to stem an alarming rise in foreclosures that has depressed home prices in most parts of the country and eroded local governments’ revenues as property taxes and utility bills go unpaid.

Nine states have committed more than $450 million to “loan funds” aimed at refinancing the mortgages of at-risk borrowers, according to a study by the Pew Charitable Trusts. A handful have brokered deals with major lenders who have pledged to ease terms for some troubled loans. A few states have lengthened the time it takes to complete a foreclosure.

“What the states are saying is: ‘We can’t wait any longer for the federal government. We have to get ahead of this,’ ” said Tobi Walker, a senior officer at the Pew Charitable Trusts. “The states are experiencing this pain more directly than the federal government is.”


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