Florida Mortgage Settlement Money: Attorney General Fights Florida Legislature For Control Over $334 Million

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There's a fight over the money paid to Florida in the national mortgage settlement, where the state attorneys general and the big banks involved in ForeclosureGate, came to an agreement: the states would not sue them in exchange for a monetary settlement and the appropriate releases. 

A report has just been released by Enterprise Community Partners that shows the State of Florida is the lagging behind all the other states involved in the national settlement deal in distributing that cash. 

There's $334,000,000.00 paid to Florida out of the overall $25 billion mortgage settlement which is specifically to be used for helping fund housing-related and foreclosure prevention programs per the agreement, and it has been placed in an escrow account by Florida Attorney General Pam Bondi.  

It's still there.

The legislature is pushing to take control of the proceeds, but there are those that are concerned that the Florida Legislature might opt to use that money other than to help Florida homeowners: this is something that has already happened to settlement monies provided to other states.  Other states have taken the mortgage settlement money provided in the AG-Bank settlement and used it for budget shortfalls and other, non-homeowner related things.  (No, the settlement agreement did not provide for this - but the money was spent on other things anyway.)

Attorney General Pam Bondi has asked for public input on how to spend the money, and she is standing firm on her legal position that as the Attorney General for the State of Florida who made the deal for the State, she has the right and duty to distribute the settlement proceeds, not the Legislature.

Now, others are taking a stand as well.  In today's Herald Tribune, there is an editorial entitled "Settle the settlement feud," where the Herald Tribune takes the position that Bondi does have the sole right and authority to distribute the money, and also points out that the Florida Legislature has already begun trying to grab part of the settlement cash to use for things other than helping homeowners. 

The Herald Tribune's editorial example: State Rep. Michelle Rehwinkel Vasilinda is proposing that the $334 million be used to provide state employees with a 7 percent raise.

That's right: one of the suggestions in the Florida Legislature appears to be taking the mortgage settlement money tagged to fund foreclosure prevention programs to boost the income of state employees.

For what Bondi proposes to do with the money, check out Bondi's list in the Herald Tribune article.  She's proposing things like spending the money to provide legal aid in foreclosure resolution for those unable to afford attorneys and to pay for rehabilitation of foreclosed homes (something that will help the property itself as well as the surrounding community).

 

Published In: Administrative Agency Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Rosa Eckstein Schechter, Eckstein Schechter Law | Attorney Advertising

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