Pennsylvania's House of Representatives this week voted unanimously to use all the funds received from the national mortgage settlement to help at-risk homeowners rather than use a portion of it to plug budget gaps.
The nation's five largest mortgage servicers agreed earlier this year to pay $25 billion to settle claims that they pushed foreclosures through without proper documentation, and part of the settlement included $2.5 billion for state governments.
Many cash-strapped states, though, are using at least some of the proceeds to help balance their budgets—funds consumer groups argue should be earmarked for homeowners facing foreclosure.
Pennsylvania received $66 million from the settlement.
The Philadelphia Business Journal reported that the House voted 197 to 0 to use the funds to restart an emergency mortgage assistance program that was shut down last summer due to state budget cuts.
If the bill is signed into law, the state housing finance agency, which administers the program, will start taking applications from at-risk borrowers in July.