California Governor Tries To Divert Settlement Funds From Housing

Posted by Orb Staff on May 15, 2012 No Comments
Categories : Mortgage Servicing

11544_220px-ag_brown California Governor Tries To Divert Settlement Funds From Housing California Gov. Jerry Brown is seeking to redirect his state's $410 million windfall from the recent $25 billion settlement with the nation's five largest banks away from housing and into deficit reduction.

The Los Angeles Times reports that California Attorney General Kamala D. Harris, who was part of the coalition of state attorneys general that negotiated the settlement, had initially announced that half of the $410 million would be used to finance housing counseling and legal services agencies working with distressed homeowners.

However, Brown's updated state budget ignores Harris' plan for the money, with the stated goal of using the funds to make interest payments on the state's housing project bonds. California is currently operating on a $15.7 billion deficit; the $410 million in question is part of California's initial cash portion of the settlement.

Harris, in a statement issued by her office, objected to Brown's plans. ‘The state Department of Justice stood firm for over a year against the nation's largest banks on behalf of California homeowners harmed by the foreclosure crisis,’ she said. ‘While the state is undeniably facing a difficult budget gap, these funds should be used to help Californians stay in their homes."

Brown's office did not publicly comment on Harris' concerns.

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