California's mortgage settlement funds should help homeowners, not reduce deficit
Statement of CRL-California Director Paul Leonard on Gov. Jerry Brown's May Revise
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.
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About the Center for Responsible Lending: The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help , one of the nation's largest community development financial institutions.