Wisconsin will share $140 million in foreclosure lawsuit settlement

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Wisconsin homeowners will share $140 million in a national lawsuit settlement over alleged foreclosure abuses by the country’s biggest lenders.

Attorney General J.B. Van Hollen and Gov. Scott Walker’s office announced the terms Thursday morning, Feb. 9, of a settlement with Bank of America, Wells Fargo, J.P. Morgan Chase, Citi-Group and Ally Financial.

It’s part of a $25 billion settlement involving banks that engaged in what Van Hollen called “unacceptable mortgage servicing practices.”

About $60 million of Wisconsin’s benefits will come from loan modifications. Those who were foreclosed upon due to servicing abuses will get $17 million.

The settlement also includes $31 million in refinancing benefits. And the state will get just under $32 million to cover future lawsuits and relief to borrowers.

Besides the financial relief, Walker and Van Hollen said the industry will be required to follow new servicing standards which, among other things, will make the loss mitigation process more transparent.

Walker, Van Hollen, and state Financial Institutions Secretary Peter Bildsten were expected to talk more about the settlement during a news conference Thursday afternoon.

State facing new $143 million deficit

Gov. Scott Walker says a budget repair bill will not be needed to eliminate a new deficit in the current state budget of $143 million. The Legislative Fiscal Bureau said Thursday that tax collections have dropped. Tax revenues are projected to be $273 million less than expected by the time the current budget expires in June of next year.

The Associated Press quoted the Walker as saying he would not have the Legislature pass an emergency budget repair bill.

Walker and five other Republican elected officials face possible recall elections this summer. Walker did not say how he would address the projected shortfall.

Fiscal Bureau director Robert Lang told lawmakers that Walker’s administration is looking at refinancing debt and other restructuring to put the budget back in balance. Lang says a full-blown budget repair bill will not be needed.

In a statement, Walker vowed that the budget would not be in a deficit during the current fiscal year, halfway through the two-year budget period.

Assembly Speaker Jeff Fitzgerald and his brother, Senate Majority Leader Scott Fitzgerald, said they remain committed to solving the budget without tax increases. Both said tax hikes would only make Wisconsin’s business climate worse, and Republicans would continue to “keep focusing on growing jobs, not the government.”

Assembly Democratic leader Peter Barca blamed the deficit on “irresponsible budgeting and a lack of serious focus on jobs and the economy.”

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