I think people at risk but in salvageable circumstances should be helped (not sure how -- each situation is so different) but if all someone needs is to refinance, what's stopping them now?
Is it practical for the state to go after banks that offered fraudulent loans or later processed the loans in a fraudulent manner, or is that more an action for the feds? Maybe the state should join with other states in taking action -- this matter does not seem to be confined by state lines. Yes, I'm assuming Van Hollen is not on the side of the small homeowners here and we'd need to work around him.
I'm not sure the state needs to be recruiting lawyers to work pro bono, even if an office is provided. People should be paid in a fair manner for their work, even lawyers. And this one might require specialized expertise, not just a few well-meaning recent law school grads.
Possibly part of the funds could be used to tide homeowners over while their lawsuits proceed. You can assume the banks' lawyers will do everything they can to delay at each step, knowing individuals will run out of money before banks do.
I think one good possible use would be to provide subsidized legal assistance to homeowners in foreclosure to see to it that all necessary legal procedures were followed, and challenge any improper foreclosures in a class action lawsuit.
This makes sense to me because most people have no idea what happened to their mortgage once they signed the papers. From what I can tell, a lot of times nobody
knows what happened, or who holds it now. Homeowners obviously can't negotiate these things solo.
I am glad to see these questions raised, even though a lot of us out here don't know enough to offer many ideas. Perhaps the job of a candidate for governor is to clarify the questions and come up with suggestions for how to use the settlement money so we have something to think about. It sounds like a good issue to run on.