Why Florida is Sitting on $300 Million Meant to Help Homeowners

Why Florida is Sitting on $300 Million Meant to Help Homeowners

by Cora Currier ProPublica

Florida has the highest percentage of home loans in foreclosure in the country. So why is more than $300 million that could help homeowners sitting unused?

Florida was awarded those millions in February as part of the $25 billion national settlement between five of country’s biggest banks and forty-nine states and the District of Columbia. The settlement resolved allegations of wrongful foreclosures and other mortgage servicing abuses, and required banks to offer some homeowners the opportunity to modify their loans or refinance, or, in some cases pay homeowners directly for wrongful foreclosure.

The banks also had to pay $2.5 billion directly to state governments. Florida’s sum was the largest, after California, in part a measure of how deeply the mortgage crisis affected the sunshine state.

Yet Florida is one of just a few states where the Attorney General has not announced plans for a significant portion of the money. We’ve contacted every state to find out what they were doing with that money. Of the $2.5 billion going to states, just over a billion dollars has been pledged for housing-related programs, while a roughly equal amount has been diverted to plug budget holes or fund programs unrelated to the foreclosure crisis. $378 million is still to be determined, and almost all of that is Florida’s.

Florida’s funds are caught between the Attorney General, Republican Pam Bondi, and the Republican state legislature. Bondi has pledged to make the money available to homeowners; earlier this year, she called for suggestions from the public. Some state lawmakers, however, insist that it needs to go through the regular appropriations process u2014 where it could potentially be siphoned off into other programs. And that wouldn’t happen until March, when the legislative session begins.

“We were very happy about the Attorney General’s commitment early on that the money be used within the spirit of the settlement,” said Jaimie Ross, president of the Florida Housing Coalition, an advocacy organization. “But is it just going to sit there until the legislature starts so that we can wait to see how they want to use it? The silence is deafening.”

A spokesman for the Attorney General said, “it’s a matter of having a dialogue between the two sides.” He could not give a timeline for when a decision might be reached. The 2013 budget request Bondi submitted to the legislature last week made no mention of the settlement.

The mortgage settlement states that Florida’s money can be spent “as directed” by the Florida Attorney General for “purposes consistent with” the settlement, such as programs aimed at homeowner protection or consumer fraud. But the legislature should still “play a role,” according to Katie Betta, a spokeswoman for incoming State Senate President Don Gaetz, a Republican.

The Democratic minority leader of the state senate, Nan Rich, said, “It’s unconscionable to be sitting on this money.” 11 percent of Florida’s mortgaged homes are currently in foreclosure, and the state saw 92,000 completed foreclosures in the year ending August 2012, second only to California.

Both Rich and Jaimie Ross of Florida Housing Coalition expressed concern that the legislature could divert the money away from housing. One Democratic representative has already suggested it be used to fund a pay raise for state employees.

It wouldn’t be the first state to see that happen. In May, we showed how almost one billion dollars that states received for the settlement had gone to plug budget holes or fund programs unrelated to the housing crisis. California, for example, received $410 million, but it all went to the general fund. Ultimately, the Attorney General’s office ended up with just $18.4 million earmarked for housing counseling and overseeing the settlement.

Arizona’s state assembly diverted $50 million u2013 more than half the state’s total u2013 to the general fund. Housing advocates challenged the transfer in court, but a judge ruled this month that it was legitimate. North Carolina legislators also ended up rerouting $7.8 million that had been intended for housing counseling to free up money in the state budget.

New Jersey put the $75 million it received towards various social programs, including affordable housing. But the money funded preexisting programs, rather than supplementing them or starting new initiatives, as part of an effort to balance the budget.

A spokesman for the state treasury told us earlier this year that the settlement did not require them to spend extra money. “If we put [the money] into the budget and don’t have to cut something else, that’s a net gain,” he said. (The treasury didn’t respond to our more recent requests for comment.)

Advocates and some lawmakers protested the decision not to boost spending for housing. They say it may follow the letter of the settlement, but not the spirit. According to CoreLogic, New Jersey had the second-highest percentage of mortgages in foreclosure, after Florida.

What other states are doing with the money

When we first mapped out where the settlement millions were going, many states hadn’t yet outlined plans. We’ve updated our comprehensive map to show developments since then. Here’s a sampling of what’s happened:

Attorneys general and lawmakers are still working out how the money will be used in a few other states besides Florida:

Some of the states that turned over their settlement money to their legislature haven’t yet seen it spent. The biggest case is Texas, where the legislature won’t meet until January to determine how to budget the $134 million it received. There’s no requirement that any of that money be spent on housing.

Additional reporting by Paul Kiel.

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4closureFraud.org

Comments
8 Responses to “Why Florida is Sitting on $300 Million Meant to Help Homeowners”
  1. Sue Em says:

    I want to puke when I read about “housing counseling”! Do we need to be taught how to be responsible homeowners? Housing counseling is only acceptable when counseling the banksters about their abuses.

  2. bobbi swann says:

    I emailed the article from above to Heather Van Nest @ Channel 10 news. My hope is that they will investigate this further. I know it’s a long shot but reaching the DOJ and filing a complaint does nothing (except put your name and information out there as an activist!) This is a travesty and as a Floridian who has been fighting both Chase & Citi on two seperate foreclosures that is amassed with fraud someone needs to step in and control this monster created by the National Settlement!

  3. Fury says:

    pam biondi is a disgrace.
    she represents everything that is wrong in florida.

    so many families have been devastated by the fraud
    that is being committed every day in Florida.

    rather than help those people,, pam w/ her stiff botox smile kisses the asses
    of those bottom-feeding criminals.

  4. Pam Bondy stinks! We need her out of Florida Period!!!

  5. THAT F-LOSER PAM BONDI KNOWS WE’RE NOT LOSING OUR HOMES ON PURPOSE WE’RE LOSING THEM TO PEOPLE WHO DO NOT EXIST IN FLA. W/ NO LEGAL CAPACITY TO SUE…

    THEY ARE NOT REAL NOTEHOLDERS . SHE KNOWS ABOUT THE FRAUD, FORGERIES, &

    EMBEZZELMENT OF PEOPLE’S HOMES. ILLEGALLY HOPEFULLY THAT BITCH WILL LOSE
    HER HOME…

    EVERYONE HAS COMPLAINED TO HER

    SHE’S DONE NOTHING TO HELP US, SHE NEEDS TO GIVE UP THE MONIES & PAY THE PEOPLE WHO’S HOMES WERE TAKEN ILLEGLLY W/O REAL OWNERSHIP, SHE’S AN ASSHOLE ,

    SHE NEEDS TO STAND ON SOME CORNER THE DIRT BAG. SHE’S PROBABLY GETTING KICKBACKS,

  6. Poof says:

    A politician & our money need I say more !

  7. Liberty and Justice for WHO??? says:

    When I was being Foreclosed on, I was going to just let the bank take my house and move on. Then I started to learn about all the fraud, and the Robosigning and decided to look into it further. Once I discovered my own MERS laden Robosigned documents, then hell yea I am going to fight it in court. Had the banks been LEGALLY foreclosing upon me, then I would have been out of my home years ago. But they chose the ILLEGAL route. I did not use fraudulent documentation to obtain my Mortgage.

    The BANKS and their ILLEGAL activities caused this mess. I am not going to be “Rewarded” but it would certainly help off set some of the legal expenses I have had to occur due to the BANKS ILLEGAL ACIVITIES.

    My case was dismissed in Ocotber of 2010. Now they have refiled a new Lis Pendens against me and guess what they are using??? The same Assignment of Mortgage that was signed by Jeffrey Stephan as a VP of MERS. This is the same document that the judge saw and dismissed my case and sanctions were granted!!! I am so furious with Pam Bondi for not looking out for the people of Florida. She is a BANKSTER WHORE!

  8. Isabel S - Florida says:

    Pam Bondi, that is easy to say when we, the Florida taxpayer/homeowner, are paying your salary and mortgage. This woman is a disgrace and a bankster-lover!

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