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U.S. Foreclosure Settlement Muddies Outlook for Mortgage Relief

The foreclosure-abuse settlements announced yesterday by federal regulators may make it harder for state attorneys general and the Obama administration to force banks to reduce loan balances for more troubled U.S. homeowners.

The 14 largest U.S. mortgage servicers, including JPMorgan Chase & Co. and Wells Fargo & Co., agreed to review all foreclosed loans from 2009 and 2010, and pay back losses in cases that were mishandled. They also will improve procedures by hiring staff, upgrading document-tracking systems and assigning a single point of contact for each borrower.