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Federal government reaches settlement for foreclosure abuses

The lagging economy and large number of foreclosures have dominated the news in South Carolina and the rest of the country. Abuses made by big banks when dealing with foreclosure claims have only inflicted more pain on the thousands of families dealing with the loss of their home. Recently, the federal government reached an agreement with five of the nation's largest mortgage lenders to compensate those who were hurt by unfair foreclosure practices.

As a part of the agreement, the large mortgage lenders will have to pay $25 billion to homeowners that were hurt by unfair foreclosure practices. Among the dubious bank practices were many instances of bank employees signing foreclosure documents without even reading them. Nearly 750,000 Americans were victims of unethical foreclosure practices and will receive $2,000 each for the abuses.

Government and lending officials have declared this to be a major step toward resolving the nation's economic and housing woes. They believe this will once again instill a sense of trust in consumers, so they are more willing to borrow money in the future.

Not everyone is satisfied with this settlement, however. Critics charge that the settlement does not go far enough to provide compensation for those caught up in the abuses. They indicate that thousands of families hurt by unfair foreclosure practices will not even see any of the settlement. Furthermore, they believe that a settlement worth a few billion dollars is nothing more than a slap on the wrist for such large financial institutions.

Regardless of how the foreclosure settlement pans out, the reality is that too many people in South Carolina have lost their home as a result of foreclosures. For many, choosing to make a short sale on their home was not an option they even considered. The specter of a foreclosure is stressful and scary for many families. However, those nearing the point of foreclosure are not without alternatives. By consulting with a trustworthy legal professional, South Carolinians can figure out a way to make it through their financial troubles with as little harm done to their financial situation as possible.

Source: WCSC News, "$25B settlement reached over foreclosure abuses," Derek Kravitz, Feb. 9, 2012

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