Mortgage assist funds reallocated

October 19, 2012

Millions of dollars from a settlement pool intended to help California homeowner victims of mortgage abuses has been diverted to the state’s general fund by Gov. Jerry Brown to help balance his budget. (San Francisco Chronicle)

California is one of 10 states nationwide that has been using the money for purposes other than for what it was intended — to mitigate some of the financial damage done to homeowners by providing relief programs, legal aid and counseling, foreclosure prevention, and anti-fraud measures.

Brown’s action was protested by Attorney General Kamela Harris, who had been part of the litigating team seeking the nationwide settlement from five major banks. The governor allocated most of the money, $410.6 million, to service housing bond debt, and is holding back $118 million for similar uses in 2013-14.

The author of a report studying the manner in which states have been using the settlement, Andrew Jakabovics, said, “The direct payments were intended to repair some of the harm done. It is wrong to have treated the money as if the state had won the lottery.”



  1. r0y says:

    Wait a minute, were these funds EARMARKED or DEDICATED? If not (I’m reading “intended” a lot), then the state can do whatever it wants to do.

    Who was asleep at the wheel by NOT demanding that these funds/settlements be earmarked or otherwise legally tied to the “intention” of what they were supposed to be for?

    It is always about money. They never have enough, and so many people in California are stupid enough to keep giving them more. Have our schools been “saved” yet? We’re not likely to see homeowners “saved” either. Has this state ever “saved” anything, really?

    (0) 0 Total Votes - 0 up - 0 down
  2. Cicero says:

    Attorney General Harris was right to object to diverting these dedicated funds to simply plug holes in California’s leaky ship of state. It make’s voting for Brown’s fuzzy, regressive, proposition 30 a tough decision. No matter what the campaign ads promise, prop 30 funds can be used any way the legislature wants … to cover their budget flubs.

    Molly Munger’s Proposition 38 actually makes sense. It adds high income tax brackets we had when Pete Wilson was Governor and locks those funds raised into paying for education. And unlike the failed attempt by Cuesta College a couple of years ago to raise money limited to putting up new buildings [without raising funds to hire instructors to teach in those buildings] Proposition 38 funds can be used to add teachers, custodians, text books, paper, pencils, computers, software and the things that kids need to learn.

    (-6) 10 Total Votes - 2 up - 8 down
  3. BeenThereDoneThat says:

    I love that liberals will beat us over the head that we need more taxes for this or that and wonder why we don’t trust the Gov. in doing what they say with it? HERE IS A PRIME EXAMPLE!!!! Also lets not forget the 54 million park money debacle. WAKE UP AND SMELL THE COFFEE!!! Stop giving your money or better yet voting to give away MY money, for typlcial Gov. BULLSHIT!!!

    (20) 24 Total Votes - 22 up - 2 down
    • The Gimlet Eye says:

      You make some good points, but only Democrats?

      Isn’t the real enemy big government?

      And doesn’t big government contain many strange bedfellows?

      (9) 13 Total Votes - 11 up - 2 down
  4. MaryMalone says:

    It must be GRAND to be King, no?

    I really don’t think the federal funds were provided as a giant slush fund for the governor to use by whim.

    I wasn’t voting for Brown’s education tax bill before he commandeered the money that was supposed to help victims of the mortgage fraud. I’m not voting for any tax increase until Brown abandons his vanity project, “The Bullet Train to Nowhere,”but I certainly am not going vote for any tax increase now.

    (20) 22 Total Votes - 21 up - 1 down
  5. SLOBIRD says:

    And people really think PROP 30 is going to save the schools. This is a scam to help the State out of their debt crisis. This has nothing to do with the schools but lots to do with unions, budget and more money for the State to spend to the City and County. So let’s see, Obama says the average working class household will see a $4,000 tax increase, the Obamacare has tax bills all over in it, Cayucos threatens its citizen with no fire protection on Nov 7 if the assessment on the ballot is not passed, and on and on and on. We are all going to see more taxes, assessments, fines, penalties, and fees in the coming years. This is all going to get nasty! Close Cuesta and other non functioning community colleges who are underperforming, stop all the State grants where Cities have to have matching funds for nonsense in this ecomony like bike paths, sidewalk curb bumps (gawd, how did we ever survive without red/green etc sidewalk color crossings), etc. Let’s get back to neccessities, essentials, and commonsense.

    (21) 23 Total Votes - 22 up - 1 down
  6. GrayGranny2010 says:

    Can someone better explain this to me? This seems like criminal behavior on the part of our governor and the legislature. Am I missing something? I would think California residents who went through foreclosure may have a class action suit with their name written all over it.

    (26) 26 Total Votes - 26 up - 0 down
  7. Mike says:

    Serious question: Is that theft?

    (24) 24 Total Votes - 24 up - 0 down
    • Robert1 says:

      Not if you are a democRAT, its redistribution 101.

      (17) 23 Total Votes - 20 up - 3 down
      • The Gimlet Eye says:

        Don’t the Republicans “redistribute,” too?

        (-10) 20 Total Votes - 5 up - 15 down
        • pasowino says:

          Yes, they redistribute wealth from the middle class to fat cats on wall street. They are “pro-Business”.

          (-7) 19 Total Votes - 6 up - 13 down
          • SLOBIRD says:

            So the fat cats on wall stree just gave the State $410 million that we fought for because of the damage done to citizens who lost their homes through wrong foreclosures and now these citizens see their State government rob them too! So, what is the difference between Wall Street and Goverment? Oh yea, government didn’t earn it and calls it redistribution. Silly me!

            (6) 10 Total Votes - 8 up - 2 down
  8. The Gimlet Eye says:

    Class action suit filed against twelve major banks for rigging interest rates so that many mortgage holders were forced into foreclosure. [This claim should be easy to prove, but will bank executives be punished? Probably not. We shall see.] DailyMail 2012 Oct 15

    (2) 6 Total Votes - 4 up - 2 down
  9. kayaknut says:

    Again, we need to say, “Mr Brown, No on Prop 30”, no matter how much you threaten students, parents and schools. We are taxed enough.

    (39) 47 Total Votes - 43 up - 4 down

Comments are closed.