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TUESDAY, JULY 5, 2011, 11:58 A.M.

Wells Fargo settlement will be used to help homeowners facing foreclosure

Money obtained by Washington's Attorney General's office  will be used to provide free legal help to homeowners trying to work through a foreclosure.

The money, amounting to more than $1 million, is part of a settlement with Wells Fargo Bank, in which the state alleged that Golden West, acquired by Wells Fargo in its purchase of Wachovia Bank,  engaged in questionable loan practices.

That is the October 2010 agreement with Wells Fargo. The AG's office, in that deal, required that the bank provide $29 million in adjustments for about  400 Washington borrowers who received payment option adjustable-rate mortgages. That amount included nearly $12 million in principal forgiveness.

The $1 million grant will go to the Washington State Bar Association's Home Foreclosure Legal Aid Project, which offers free attorney help for state residents facing foreclosure.

Starting July 22, the state's Foreclosure Fairness Act wil provide distressed borrowers with a counselor who will serve as an ally in legal efforts to work through a foreclosure process.

The WSBS project will focus on providing assistance based on which counties have the highest rate of foreclosures.

The AG's office also earlier provided the bar association with $320,000 from the Countrywide/Bank of America settlement for the same purpose.

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Tom Sowa
Tom Sowa covers technology, retail and economic development and writes the Office Hours blog.