Alabama Diverts Settlement Funds Away From Housing Assistance

Posted by Orb Staff on June 19, 2012 No Comments
Categories : Mortgage Servicing

11819_225px-flag_of_alabama.svg Alabama Diverts Settlement Funds Away From Housing Assistance Alabama has become the latest state to divert its direct payment funds from the National Mortgage Settlement away from homeowner assistance programs.

The Associated Press reports that $19.3 million of the $26 million given to Alabama in direct payment funds is being set aside to finance operations in the attorney general's office and in the state's district attorneys' offices. The remaining funds have yet to be allocated, although two local advocacy groups – the Arise Citizens' Policy Project and the Low Income Housing Coalition of Alabama – are lobbying to use the money for housing programs designed to aid low-income families, veterans and seniors.

The text of the National Mortgage Settlement requires the states receiving direct payment funds to use the money ‘for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial fraud or unfair and deceptive acts or practices, and to compensate the states for costs resulting from the alleged unlawful conduct of the defendants.’ According to a recent report by Enterprise Community Partners, only 26 states have ‘substantially’ used their funds for housing-related purposes.

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