States using robo-signing funds to plug budget gaps

Consumer advocates say money could have helped homeowners

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Despite protests from dozens of public interest groups and the state’s attorney general, California is set to use $411 million in funds coming to the state from the robo-signing settlement with mortgage servicers to help plug the state’s massive budget gap.

Under the $25 billion agreement with the nation’s five largest mortgage servicers over so-called "robo-signing" practices, states were allocated a total of $2.5 billion in cash