A little background information to get us started…
In March of 2012, 49 state Attorney Generals filed the National Mortgage Settlement to the tune of $25 billion from the five largest loan servicers. Payments from the servicers were to be paid out on a state by state basis with each state receiving different amount depending how they were affected by robo-signing and unscrupulous lending practices.
$20 billion of the payments were earmarked for principal reductions, refinancing, forbearance, anti-blight provisions, short sales, relocation assistance, and benefits for military members. The additional $5 billion was to be given to federal and state governments. $1.5 billion of that was to be used for borrowers that were foreclosed on between Jan 1, 2008 and December 31, 2011. DOJ
The money was supposed to go to current or former borrowers… . So where will it end up?
Wisconsin: 25.6 million (20%) to fix the state budget. Here
Georgia: $100 million to the state’s general fund. Here
Missouri: $40 million (20%) into the general state fund. Here
Texas: $125 million to the state general fund. Here
Arizona: $50 million for budget short falls. Lawsuit pending. Here
- 27 state are using most if not all for housing and foreclosures.
- 9 states are using part for housing and foreclosures.
- 6 states are not using the funds for housing or foreclosures.
- 9 states are undecided.
Just when you think the government is looking out for you…