Controversy over WI portion of federal foreclosure fraud settlement

MADISON -- Last week, a $25 billion settlement was reached with the federal government and five of the nation's banks over foreclosure fraud. Wisconsin will be getting a portion of that money, and although Governor Walker says most of the money will be used to help homeowners in need, some say they're not happy with how it's being spent.

Wisconsin is getting $140 million in the foreclosure fraud settlement, but people in the crowd at a press conference Tuesday say they're upset about where the money is going. "We realize there are budgets and there are agendas, but there are people that come first. People that are already suffering. People that have lost their homes. People who have been displaced. Now, they get robbed again," Reverend Willie Brisco with MICAH - the Milwaukee Inner City Congregations Allied for Hope organization said.

MICAH, along with several Milwaukee city leaders gathered Tuesday to draw attention to this issue. They disagree with Walker's plans to use about $26 million from the settlement to fill gaps in the budget. "It is wrong. It is an unconscionable bait and switch for the state of Wisconsin to take money that has been set aside for neighborhoods that have been devastated by the foreclosure crisis and use it to balance their unbalanced budget," Milwaukee Mayor Tom Barrett said.

Walker's press secretary Cullen Werwie says: "Governor Walker supports allocating the funding from the banks based on the terms contained in the settlement. The vast majority of funding from the banks will go to Wisconsin homeowners."