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I’m trying to keep a running tally of the direct funds to states from the foreclosure fraud settlement that will get diverted to General Funds to fill budget holes. When we last left this story, Maine had decided to send $5.7 million to the general fund, joining Missouri’s $40 million and Wisconsin’s $26 million. So let’s keep the tally going with this from David Lieb of the AP:
In Pennsylvania, where a fourth straight budget deficit is projected, Democrats are pressing the Republican-run attorney general’s office to use some of its $69 million payment to offset $2 billion in cuts to programs that benefit education, the elderly, disabled or poor.
“The governor’s budget has so many cuts to so many valuable programs, if the attorney general’s office has $69 million, why not use that to offset these cuts to essential programs?” said state Rep. Joe Markosek, the ranking Democrat on the House Appropriations Committee.
Vermont plans to use $2.4 million from the settlement to help balance its budget. Maryland Attorney General Doug Gansler said about 10 percent of his state’s $62.5 million payment will be made available for the governor and lawmakers to spend as they choose.
Illinois Attorney General Lisa Madigan is cited in the story saying she would oppose using the money for the budget, and California Governor Jerry Brown said through a spokesman that no decision has been made.
So let’s just go with what we know. We have the $71.7 million from the previous three states, and then $2.4 million from Vermont and $6.25 million from Maryland. In addition, Democrats are pushing for general fund diverting in Pennsylvania, but that hasn’t been confirmed.
So the total for five average-sized and small states is: $80.35 million. That’s 2.9% of the settlement. But it’s a much larger percentage, over half, of the total payout in those five states. And we have 44 states to go (remember, Oklahoma opted out).
In Florida, one of the biggest recipients of settlement funds, Rep. Ted Deutch (D-FL) got six members of Congress on a letter, including DNC Chair Debbie Wasserman Schultz and Republican Richard Nugent, to demand that Pam Bondi and Rick Scott not divert any of the funds to the budget. Frankly, I’m not optimistic on this. But the appearance of both Nugent and the DNC Chair on the letter shows that Scott and Bondi at least may pay a price here.
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Thanks for keeping tabs on all these “diversions”, David.
Meanwhile, here’s how things are going among FL families so deeply affected by this crisis:
Struggling Floridians line up for chance to plead to keep homes
“Nearly 1,200 people lined up at a downtown Miami conference center on Wednesday, holding onto mortgage documents and income statements in the hope of saving the homes they are struggling to pay for.
. . .
“Nearly one million [far short of original projections of 4 million] U.S. homeowners have won permanent reductions in their mortgage payments since President Barack Obama’s administration launched a foreclosure prevention program in 2009, the U.S. Treasury said earlier this month.
. . .
“It was the 64th “Free Help for Homeowners” event put on by the Obama administration and the 11th in Florida, where nearly 12 percent of mortgaged homes are in foreclosure, the highest rate in the nation.
“More than 17 percent of Florida mortgage-holders are 90 days late in their payments, also the highest in the nation, according to a CoreLogic report earlier this month.”
LINK.
This diversion of funds is a DOUBLE rip-off of the “middle class” [i.e., foreclosed-upon home owners].
**It takes money away from them to give to “state budgets;” and
**By providing states with a way to plug the holes in their budgets, it allows them to avoid the remedy of needed tax increases.
Of course I’m sure these folks see it as allowing states to “avoid cuts to needed programs,” but it’s all on the backs of those who’ve already been harmed — and who probably won’t be among those benefiting from the $$$ now in state budgets, available for disbursement.
It’s as though someone who’s injured in an auto accident and successfully sues the perpetrator then has his/her judgment snatched away to “plug holes in the state/county budget,” or perhaps put up better signs at crosswalks. Meanwhile, the injured auto accident victim still has the costs of medical care, crunched auto, physical therapy, lost wages, etc., but no $$$ to make him/her right.
Talk about “socialism” . . . .
Does this mean underwater homeowners don’t have to pay their property tax this year? Otherwise it would seem they are paying it twice over.
I thought this “settlement” had a “B” in it. Not an “M”.
I’m sure FL Gov. Rick “Medicare Fraudster” Scott will find a way to profit from the settlement.
Is it any surprise that politicians, owned by oligarchs who have a hard time understanding the worth of compassion, should emulate the behavior of their owners and thus find themselves without the simplest notion of fairness?
I have mixed feelings here. In Wisconsin, where I live, Higher Ed took a quarter of a billion dollar hit, plus additional givebacks, way out of proportion with the percentage of the state funding it receives. If some of this settlement money shores up education, I have a hard time complaining.
Oh please! Do you really think somebody like Scott Walker would use that money to shore up public education? He’d use it to gut corporate taxes, (again), long before he’d use it to pay for public education.
I wonder how much is going to be “redirected” back in bankers’ pockets?
“Democrats are pressing the Republican-run attorney general’s office to use some of its $69 million payment to offset $2 billion in cuts to programs that benefit education, the elderly, disabled or poor.”
Proving yet again the the D’s are just as shameless and corrupt as the R’s.
$69 million represents a little over 3% of the shortfall, a proverbial drop in the bucket.
Trust me, I know that. But even if the money goes to the Medicare gap, it helps education.
funny!
I do know that there is an ‘fu’ in the spelling of that settlement, however
As far as I’m concerned, this is theft. The only remedy is to refuse to send the money to states that will not pass it on to people who were foreclosed upon.
That is its purpose, without that “agreement” (such as it is) there would be no money.
It doesn’t belong to the state, and the state has no right to use the money.
Stealing it, pure and simple.
(this is really making me angry)
It is theft and embezzlement, made legal according to the letter of the law by making the state an “injured party”, and they’re licking their chops to do it.
I think you should have a problem with diverting funds even if they are re-directed to worthy and needy causes. This settlement was made to give help to the homeowners. If they use this money for another purpose, it victimizes the homeowner a second time.
More than the 2nd time
1) victimized by the scam reinsurance fees and the predatory loans.
2) Banks encouraged them to go into default to get a HAMP mod, while they prepared to foreclose.
3) The DOJ and Obama are selling most victims down the river, and only a small portion of them have a chance at $2000, while they whitewash and run cover for their biggest donors.
4) we pay for the bail out, suffer stalled economy because they don’t know the difference between economy and the stock market, lost jobs, cut services, we paid for stimulus.
4) Bernanke has bought and hid Bankers toxic assets in FED Special Purpose Vehicles for mark to fantasy prices, we’ll pay for that later.
5) the investors pay the bankers fines with their retirement security accounts.