Baltimore May Use 'Robo-Signing' Money To Level 700 Homes

How do you heal a housing market plagued by neglected homes? Destroy them.

At least that appears to be the thinking behind Baltimore's plan to use its $10 million allotment of the $25 billion "robo-signing" settlement recently reached between the nations' five largest mortgage servicers and most states.

Baltimore Housing intends to use the $10 million windfall, drawn from the $60 million allocated to Maryland under the settlement, to level about 700 homes in the city, The Baltimore Sun reports.

The anti-blight measure represents one of many applications of settlement funds that may puzzle some industry observers, who expected fines levied on mortgage servicers for forging documents and illegally foreclosing on homeowners to flow exclusively to distressed borrowers. After all, such observers might say, distressed borrowers are the group that suffered at the hands of the five servicers and prompted an investigation into foreclosure improprieties in the first place.