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Who’s to blame in foreclosure fiasco?

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The building furor over whether the largest U.S. mortgage lenders used so-called robo-signers and incomplete paperwork to force delinquent borrowers from their homes has mushroomed into a probe by the attorneys general in all 50 states.

An empty mail box is seen at the front door of a foreclosed house in Miami Gardens, Florida in this September 15, 2009 file photo. REUTERS/Carlos Barria/FilesThose on Wall Street, however, are largely unsympathetic, insisting that possible errors in the foreclosure process are beside the point and that the process begins only when a borrower starts missing mortgage payments.

The potential fallout has raised questions about the depressed U.S. housing market, which was being helped by foreclosure sales. It has also put pressure on stocks as investors worry about the impact on banks’ financial health.

Who is at fault for the foreclosure mess?

    Banks Borrowers

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Is housing rescue plan enough?

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President Barack Obama’s much-anticipated plan to deal with the U.S. housing crisis aims to help as many as 9 million families avoid foreclosure on their homes, one of the root causes of the global financial meltdown.

The Obama plan will involve government subsidies to mortgage servicers and lenders to encourage them to lower payments for borrowers in distress.

Pinching pennies

Piggy BankTimes are tough for Americans as their wallets take multiple blows from the housing slump, rising oil and food prices, growing unemployment, inflation fears and recession talk. Many homeowners are facing negative equity, with mortgages bigger than their property’s value.

Even as recently as November, households were going into debt to maintain spending, but new numbers show that Americans are saving at the highest rate since March 1995.

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