Brown Targets Mortage Settlement Funds For State Budget Gap
Wednesday, May 16, 2012
Housing advocates want the governor to stay away from settlement money that's meant to keep people in their homes.
SAN DIEGO Gov. Jerry Brown is trying to balance a state budget that has a $16 billion shortfall, and mortgage counselors say he’s doing it by raiding a settlement fund intended for homeowners facing foreclosure.
The huge settlement with the nation's mortgage banks still means California's distressed homeowners are entitled to $18 billion in debt forgiveness. But Brown has targeted $410 million from the settlement, which is meant to pay for counseling and assistance, and he wants to divert it to the state's general fund.
California faces a $16 billion budget deficit, and many other states have also used the settlement funds fill state budget gaps. Still, advocates say Brown is robbing money that’s meant for distressed homeowners.
Ali Tarzi, with Community Housing Works of San Diego, said California could end up getting a lot less than $18 billion in home debt relief if homeowners are given no guidance in how to apply for the funds.
“Any family who has been through a loan modification process … the maze can be very daunting if you don't have help or you don't have an advocate on your side,” he said.
California Attorney General Kamala Harris negotiated with mortgage banks to reach the settlement. She said the $410 million should be used to help people say in their homes, and she will try to change the governor’s mind.
Last year, 19,000 foreclosures notices were sent out to homeowners in San Diego county; 258,000 in all of California. The attorney general’s office said there are about half-a-million California homes in the foreclosure process.
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