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 49 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. And $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 — 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.
Copyright 2012 The National Memo