California's dire budget situation claimed a new casualty in the governor's May Revise yesterday: $410 million in bank penalty funds from the National Mortgage Settlement intended to assist California homeowners.The governor instead proposed to use the funds to reduce the state's deficit rather than to help borrowers access settlement programs.
Attorney General Kamala Harris worked for well over a year to reach an acceptable settlement with banks who had harmed California homeowners with robo-signing and other mortgage servicing abuses. The $410 million in penalties paid by five big banks had been earmarked to help California borrowers access benefits under the settlement and bring to justice those servicers that broke state law.
California needs every dime it can get to balance its budget.But mortgage settlement funds should be off limits.
For more information: Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org or Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org.