Part of foreclosure settlement going to budget shortfall

MILWAUKEE -- Milwaukee Mayor Tom Barrett applauded Attorney General J.B. Van Hollen's work to help negotiate a mortgage settlement for struggling homeowners, but he strongly opposed Van Hollen and Gov. Scott Walker's decision to use a portion of that to balance the state's recently announced budget shortfall.

Wisconsin's share of the $25 billion dollar settlement is about $140 million.  $32 million of which is for discretionary spending by the state.  The Walker Administration is choosing to use over $25 million of that on the overall budget shortfall.

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Van Hollen says it was his idea. "Instead of having your buying power go down and further raise taxes, some of this money is going to help our state budget as well, and that is part of what was discussed with institutions when we came up with this settlement," Van Hollen said.

Barrett called the move "unacceptable and a violation of the spirit of this settlement."  He said of Wisconsin's zip codes with the most foreclosures, the top six are in the City of Milwaukee.

The money will be used to help homeowners who are underwater by relieving some of the principal of their loan, and for homeowners who have an interest rate of higher than 5.25% they would be eligible to refinance.

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