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From the staff of the Tampa Bay Times

Bondi strikes a deal with Legislature over $300M foreclosure settlement

2

November

 Florida Attorney General Pam Bondi announced Friday that her office has reached a deal with the Florida Legislature over how to use $300 million in foreclosure settlement money that has sat dormant since March amidst negotiations over spending authority.

One-fifth of the money, about $60 million, could be approved in the coming weeks for programs like down-payment assistance, legal counseling for foreclosures and initiatives to help deal with the backlog of foreclosures in state court.

The state Legislature will decide how to spend $200 million of the total during the next legislative session, meaning it will be spent after May. According to the agreement, that money will go to “housing-related” initiatives, a broad term that could include "foreclosure prevention, neighborhood revitalization, affordable housing, homebuyer or renter assistance, legal assistance, counseling and other housing-related programs."

The deal also allows an additional $40 million to go to state coffers as a “civil penalty”, adding to the $33 million that has already been sent to the state treasury.

The deal was announced by Bondi, Speaker-designate Will Weatherford and incoming Senate President Don Gaetz.

Bondi originally argued that she had the authority to spend the foreclosure-settlement cash, while legislative leaders pointed out that they are legally authorized to appropriate funds.

As the two groups negotiated, the money sat in an escrow account, while other states began putting their portion of the settlement to use. As of last month, Florida was the only state that had yet to announce how it would use the money.

Meanwhile, Florida recently became the state with the highest foreclosure rate in the country. The $300 million cash payment came in addition to more than $8 billion in mortgage assistance that Floridians were set to receive directly from banks as part of the national $25 billion settlement.

Other states have come under fire from consumer advocates for using money from the national mortgage settlement for issues not related to the housing crisis.

Though Bondi has repeatedly stated that she wanted the money to go directly to housing-related issues, it was not clear if the Legislature would sign on to that. If the Legislature sticks to this agreement, most of the money from Florida's settlement will go to help the state's weary housing market.

"This plan gets much-needed assistance to the homeowners and communities suffering the effects of the foreclosure crisis, and ensures that the settlement funds are spent with the transparency, accountability and flexibility that comes from the legislative process,” Bondi said in a statement. “I thank President-designate Gaetz and Speaker-designate Weatherford for working together with me to implement the mortgage settlement in a way that’s in the best interests of our state.”

Added Gaetz: “I am grateful to Attorney General Bondi and Speaker-designate Weatherford for working with us on a proposal which ensures that these funds are appropriated by the legislature in a transparent and accountable manner,” said Gaetz, R-Niceville. “Together with the approximately $7.5 billion in relief that will go directly to homeowners, this funding will play an important role in the multitude of state and federal efforts to provide relief for homeowners facing foreclosure.”

See the full press release below:

TALLAHASSEE, Fla.—Attorney General Pam Bondi, President-designate Don Gaetz
and Speaker-designate Will Weatherford today jointly announced their
support for a plan for allocating the remaining $300 million that the
Attorney General recovered for Floridians in the national mortgage
settlement. The plan ensures that the entirety of these funds will be
spent consistent with the terms of the settlement agreement, but also that
the funds will be allocated through the legislative process. These
settlement funds are in addition to the approximately $7.5 billion in
expected relief that the national mortgage settlement provides directly to
Florida homeowners.

At the next meeting of the Legislative Budget Commission, with the support
of Gaetz and Weatherford, Bondi will seek approval for budget amendments to
disburse $60 million of the settlement funds. Bondi anticipates proposing
that the $60 million be used to fund down payment assistance for
Floridians, foreclosure-related legal assistance and counseling, state
court initiatives to ease the foreclosure backlog and Attorney General’s
office enforcement efforts.

The balance of the funds will be allocated through the appropriations
process in the upcoming legislative session. Gaetz and Weatherford have
agreed to support the appropriation of approximately $200 million for
housing-related purposes, consistent with the terms of the settlement
agreement. Although the specific appropriations must be determined through
the legislative process, possible uses of these funds include foreclosure
prevention, neighborhood revitalization, affordable housing, homebuyer or
renter assistance, legal assistance, counseling and other housing-related
programs. Finally, consistent with the discretion afforded her under the
settlement agreement, Bondi will designate approximately $40 million of the
settlement funds as additional civil penalties.

“This plan gets much-needed assistance to the homeowners and communities
suffering the effects of the foreclosure crisis, and ensures that the
settlement funds are spent with the transparency, accountability and
flexibility that comes from the legislative process,” said Bondi. “I thank
President-designate Gaetz and Speaker-designate Weatherford for working
together with me to implement the mortgage settlement in a way that’s in
the best interests of our state.”

“I am grateful to Attorney General Bondi and Speaker-designate Weatherford
for working with us on a proposal which ensures that these funds are
appropriated by the legislature in a transparent and accountable manner,”
said Senate President-designate Don Gaetz (R-Niceville). “Together with the
approximately $7.5 billion in relief that will go directly to homeowners,
this funding will play an important role in the multitude of state and
federal efforts to provide relief for homeowners facing foreclosure.”

“I appreciate the hard work of Attorney General Pam Bondi and Senate
President-designate Don Gaetz both in securing the settlement for
distressed homeowners and for representing the interests of the state,”
said Speaker-designate Will Weatherford (R-Wesley Chapel). The framework
that has been outlined today will enable the Legislature to fulfill its
important duty as appropriators while also directing these funds to those
who have been negatively impacted. I look forward to working together in
the upcoming legislative session.”

Attorney General Bondi formally entered a landmark $25 billion joint
federal-state agreement with the nation's five largest mortgage servicers
over foreclosure abuses and unacceptable nationwide mortgage servicing
practices. In addition to the funds described above, the agreement provides
direct relief to homeowners and mandates extensive reforms of the banks'
mortgage servicing practices. For more information regarding the
settlement, please click here:
http://myfloridalegal.com/pages.nsf/Main/C13C72583D0EF5BB8525799F00595D99

[Last modified: Friday, November 2, 2012 3:13pm]

    

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