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The Boston Globe


Foreclosure expert favors reducing loan amounts

PROVIDENCE — A former bank executive working to hasten a resolution to hundreds of foreclosure disputes in Rhode Island’s federal courts called the mortgage crisis a ‘‘Gordian knot’’ and said debt forgiveness needs to be part of the solution.

Former Bank Rhode Island CEO Merrill Sherman said in her special master’s report to US District Judge John McConnell last week that the best approach to fixing the mortgage crisis is reducing struggling ­homeowners’ loan amounts — an approach that has garnered significant resistance from mortgage giants Fannie Mae and Freddie Mac despite pressure from the Obama administration.

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