Earlier this year, when the banks agreed to fork over $25 billion to 49 states for mortgage abuses, Florida was one of the first in line.
Miami foreclosure lawyers understand the state has been one of the hardest impacted by the crisis, with 11 percent of homes in the state currently in foreclosure.
And yet, the money that Attorney General Pam Bondi said she wanted to funnel into housing programs is tied up in a mess of bureaucracy, making it unclear when homeowners can expect relief.
ProPublica reports that Florida is one of the only states where the Attorney General has not announced specific plans for most of the money. (In addition to the $25 billion paid directly to homeowners by the banks, there was another $2.5 million given to state governments; Florida’s share of the settlement is roughly $375 million.)
The problem, according to Bondi’s office, is a lack of dialogue with the Republican-held legislature. Bondi had earlier this year gone so far as to reach out to the public for suggestions on what to do with the money. However, a number of lawmakers have insisted that the money must go through the standard appropriations process, which is where it could potentially be sent to other programs. Plus, the new legislative session doesn’t even start until March, so that would be the absolute earliest we may have any answers.
Still, when Bondi sent in her 2013 budget request, there was no mention made of the settlement money.
The terms of the settlement specifically state that it can be spent by the state’s attorney general for purposes that are consistent with the settlement. Examples would be things like consumer fraud assistance or homeowner protections. Still, the incoming state senate president has said that the legislature needs to play some sort of role in deciding exactly where it should go.
What’s especially concerning is the suggestion by some members of the state Senate and House that the money be spent on things such as raises for state government employees or as a way to plug other budget holes.
One billion dollars that went to other states were spent this way. For example, legislators in California, which received roughly $410 million, put that money directly in the state’s general fund. In the end, the attorney general’s office was given just shy of $18.5 million for housing programs.
This is not to say that money isn’t needed for these purposes, but to spend it in areas for which it was not intended flies directly against the spirit of the settlement.
In New Jersey, state leaders did put the $75 million it received into a number of different social programs, including one that assists with affordable housing. Still, that went to shore up programs that were already in place, rather than to start new initiatives.
Florida has among the second-highest rates of foreclosure, just behind California, which had 100,000 between Aug. 2011 and Aug. 2012. During that same time frame in Florida, we had 92,000. Michigan, Texas and Georgia rounded out the top five.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
Why Florida is Sitting on $300 Million Meant to Help Homeowners, Oct. 27, 2012, By Cora Currier, ProPublica
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Shady Bank Investigations Mar Miami Foreclosure Review Process, Oct. 22, 2012, Miami Foreclosure Lawyer Blog