California Attorney General Kamala Harris has responded to Jerry Brown’s bid to raid foreclosure fraud settlement funds through the back door by zeroing out the state support for the programs she has slated for the money to go.

The state Department of Justice stood firm for over a year against the nation’s largest banks on behalf of California homeowners harmed by the foreclosure crisis. This effort resulted in an agreement that will provide billions in relief to California homeowners who are experiencing hardship. The agreement also required the banks to pay an additional $410 million to get homeowners the expert help they need to keep their homes.

The Governor’s May Revision, however, proposes to redirect this $410 million from the state’s homeowners to other budget purposes. While the state is undeniably facing a difficult budget gap, these funds should be used to help Californians stay in their homes. I plan to work with the Governor and Legislature toward a balanced budget that honors our obligations to California’s homeowners.

Setting aside the bravado on the settlement (California’s side deals make Harris’ take better than the average, but even here this isn’t a deal commensurate with the crimes), this definitely dissents from the Governor’s line on the budget. It recognizes the action for what it is, a raid of funds meant to go to help foreclosure victims. Harris doesn’t have quite the pull of Brown, of course, and she has a series of foreclosure-related legislation she’s trying to get through the legislature that I could see her trading for allowing this $292 million raid to happen. But at least there’s some fight in her at the outset. And the Attorney General does have a role to play in determining how this money gets spent.

Similarly, the Legal Aid Foundation of Los Angeles had this response:

The proposal leaves homeowners dangling again. The biggest winner is going to be banks that will not be held accountable to the spirit and letter of the national settlement. Many California families who have the ability to stay in their homes but need help navigating the loan modifications maze will not get help. We’re all going to lose as a result.

“Foreclosures and their economic fallout are what got our state budget into this mess. Spending funds on housing counselors and legal services as the Attorney General had proposed will help fix the problem. The governor’s proposal is bailing out a leaking ship.

“People at risk of foreclosure need help today, and that’s what housing counselors and legal services are in the best position to do. Government watched as foreclosures wrecked neighborhoods. Spending millions just to fill a budget deficit isn’t going to help homeowners to stay in their homes.

This brings in the underlying economic issue. California will remain mired with deficits until the housing problems are fixed. It affects property tax collection, it affects economic growth, it affects tax revenue from job creation across several sectors. The first priority should be to remove the lead weight from the economy created by the housing and foreclosure collapse. Instead, money earmarked for that purpose, regardless of its size, is seen by the Governor as a kitty to be robbed.