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But consumer advocates have said far too few people will benefit. The deal applies only to privately held mortgages and not to those owned by mortgage giants Fannie Mae and Freddie Mac. Banks own about half of all U.S. mortgages, or about 30 million loans; Fannie and Freddie own the other half. The banks will be required to make foreclosure their last resort. They won't be allowed to foreclose on a homeowner who is being considered for a loan modification. The new standards are aimed at preventing recent abuses by banks such as lost paperwork and so called robo-signing
-- the practice of employees signing papers they hadn't read or using fake signatures to speed foreclosures. About 75 percent of the settlement money will go to California and Florida, two of the states hardest hit by the housing crisis and the ones with the most underwater homeowners.
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