From AAP

US banks are getting tens of millions of taxpayer dollars through a key foreclosure prevention program to pay down borrower debt, but are also using the money to pay off their own laywer’s fees and other costs associated with taking back people’s homes.

In Florida, the more than $US1 billion ($A1.05 billion) Hardest Hit program has been operating for two years, awarding struggling borrowers 12 months of mortgage payments and between $US18,000 and $US24,000 to bring a mortgage current.

But some homeowners exiting the program are finding themselves still in debt and on the same path to foreclosure after their lender subtracted legal costs from the Hardest Hit stipend.

While the Hardest Hit program allows lenders to use the money to pay their lawyer fees and out-of-pocket expenses, the federal law that authorised the plan forbids homeowners from doing the same.

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