Florida is among states that used foreclosure $ to for general fund
Florida is among the state's that has used its millions received from the multi-billion dollar settlement with major mortgage lenders to put augment the general fund, according to a new report from Stateline.org, a project of Pewstates.org.
Florida recieved $334 million from the legal settlement stemming from state charges that banks used improper mortgage lending practices. Florida used about $260 million of it to benefit homeowners. The remaining $74 million went into the general fund, according to the report.
Jennifer Meale, spokeswoman for Attorney General Pam Bondi, said that the states that entered the settlement could designate up to 10 percent of the $2.5 billion paid to the states as a civil penalty.
The settlement also allowed for the money paid as civil penalty to be sent to the general fund, which could be used to balance the budget or be used for other needs. Florida decided to designate $74 million as a civil penalty and the money went into the general fund.
According to the report, all states used at least $1 billion of the $2.5 billion they received from the settlement with the banks to pay for pet projects or promote economic development.
House Appropriations Committee Chairman Seth McKeel disagreed with the report's assertion that Florida "balanced its budget" on the foreclosure funds.
"Our Attorney General, the Governor and the Members of the Florida House and Senate were committed to ensuring that those funds were appropriated for housing related issues consistent with the terms of the settlement agreement,'' he said in a statement. "That is exactly what occurred. The appropriation of the housing related items was not included in the General Appropriations Act, but instead was addressed in a separate bill that was dedicated specifically to that issue and nothing else."
McKeel said that over 80 percent of the $334 million was "thoughtfully appropriated to a wide variety of housing or mortgage-related programs and activities" and "the deposit of $74 million in civil penalties does not justify an assertion that Florida used the funds to balance the budget" because when the Legislature wrote the budget it "intentionally left $1.4 billion in general revenue unspent; there were no holes to plug and those funds were not needed to balance."
Under the federal settlement's $2.5 billion, the banks agreed to an estimated $51 billion in relief that Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial (formerly GMAC) will pay directly to homeowners. The banks agreed to the settlement in response to widespread errors and abusive practices that included “robo-signing” documents in foreclosure proceedings that pushed some people out of their homes unnecessarily.
States have no role in providing the $51 billion in relief to homeowners but they do have discretion over the additional $2.5 billion, which was intended to ameliorate the housing crisis. More here.
Here's how Florida spent its $334,073,974 according to the report:
$35 million for down payment assistance;
$10 million for housing counseling;
$5 million for the state court system to help with foreclosure-related issues;
$5 million to the Office of the Attorney General to fund legal aid programs;
$9,117,895 to the Florida Prepaid Tuition Scholarship Program;
$5,262,579 to the state courts system to provide technology solutions that expedite foreclosure cases through the judicial process;
$16 million to the state courts system to provide supplemental resources to reduce the backlog of pending foreclosure cases;
$9.7 million to the clerks of the court to enhance service levels to assist and support the courts in expediting processing backlogged foreclosure cases;
$10 million to the Office of the Attorney General to provide legal aid to low- and moderate-income homeowners facing foreclosure;
$10 million to the Department of Children and Families for capital improvements to certified domestic violence centers;
$20 million to Habitat for Humanity of Florida;
$50 million to reduce rents on new or existing rental units through the State Apartment Incentive Program;
$10 million to fund the construction or rehabilitation of units through the State Apartment Incentive Loan Program;
$40 million to fund the State Housing Initiative Program;
$10 million to the Department of Economic Opportunity to fund a competitive grant program to provide housing for homeless persons;
$10 million to the Department of Economic Opportunity to fund a competitive grant program to provide housing for persons with developmental disabilities;
$5 million to the Office of the Attorney General to reimburse the office for costs and fees;
The remaining funds are directed to the state General Fund as civil penalties.