Little has been done to buoy confidence that an economic recovery is at hand. A settlement of the investigations surrounding last year’s robo-signing scandal that, among other things, achieves widespread principal reduction commitments from major servicers, could change that — but only if done carefully.

During the past four years, communities in our home state, Illinois, have experienced the worst decline in housing prices and the greatest wholesale neighborhood disinvestment that we have observed in our organization’s nearly 40-year history. Struggling homeowners would clearly benefit from the modest gains in equity, affordable payments, and local housing market stabilization that effective servicer oversight and principal reduction could provide.

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