Florida grabs a ($33.4 million) chunk of foreclosure settlement money for state budget
Out of $334 million in cash payments sent to Florida in a multi-billion dollar mortgage settlement with major banks, about $33.4 million will go to help bolster the state’s budget.
Florida is one of several states taking a portion of the $2.5 billion in cash payments from big banks and using it for programs not directly related to the foreclosure crisis, ProPublica reports.
A spokeswoman for Attorney General Pam Bondi—who negotiated the settlement on Florida's behalf--confirmed that 10 percent of the cash has been sent to the general fund.
“Ten percent went to the state of Florida as a penalty,” she said. “That money goes to GR (general revenue).”
Florida’s total take in the overall $25 billion settlement—which includes principle writedowns and mortgage modifications--is worth about $8.4 billion.
About $334 million of that came in the form of a cash payment to the state, and the attorney general’s office has maintained that most of the money will be used to directly help homeowners.
Settlement documents indicate that Bondi negotiated for the 10-percent civil penalty, resulting in a $33.4 million cash payment to the general fund.
Florida is, as of now, only using about 10 percent of the settlement’s cash payment to bolster its general budget. Some other states are using all or the vast majority of their funds to plug large budget holes, according to a chart created by Propublica. A few states have clauses similar to Florida's, directing 10-percent of the money to general revenue as a penalty.
Still, some states have decided to use all of the funds for homeowners, citing that they were the main victims in the robo-signing scandal.
The remaining $300 million in Florida’s settlement cash has not yet been allocated. Bondi asked members of the public for suggestions on how to spend the money this month, and has stated that it would be used to provide direct relief help homeowners. Housing groups have advocated that the money be used for legal aid for homeowners and low-income housing programs.
Georgia directed all of its $99 million to programs designed to attract new businesses.
A spokesman for Georgia’s governor told ProPublica: “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”
It's not clear how Florida's $33.4 million will be spent, although the state has been increasing its incentives for business under the administration of Gov. Rick Scott, who has echoed the prevent-foreclosures-by-creating-jobs mantra.
Here's a link to the ProPublica story, entitled Billion Dollar Bait & Switch: States Divert Foreclosure Deal Funds.