States Fall Short on Help for Housing
Six Months after Mortgage Settlement, Less than Half of States’ $2.5 Billion Has Gone for Housing
Six months after finalizing the landmark $25 billion National Mortgage Settlement, the District of Columbia and the 49 states who were parties to the settlement have been allocating and distributing their respective shares of the $2.5 billion that was designated for them, but less than half of the announced expenditures will be used as intended. Direct payments to the states were intended to help prevent foreclosures, stabilize communities, and prevent or prosecute financial fraud. To date, states have announced plans to spend $966 million for housing and foreclosure-related activities, while $988 million has been diverted to states’ general funds or for non-housing uses. There is $588 million remaining to be allocated, of which Texas and Florida comprise the lion’s share and with the rest spread out among states that have already begun to roll out their plans.
As we previously described in our report “$2.5 Billion: Understanding how States Are Spending Their Share of the National Mortgage Settlement,” the funds are also intended to “compensate the States for costs resulting from the alleged unlawful conduct of the Defendants.” The settlement goes beyond these general guidelines, however; it also includes a short description of how each state’s attorney general has directed his or her state to spend its share of the money. In addition to tracking how states have spent their funds, we have also analyzed whether states have adhered to the language in the settlement.
Full report below…