Thursday, May 24, 2018
Business

Tallahassee officials tussle over Florida's share of mortgage settlement

TALLAHASSEE — Florida Attorney General Pam Bondi is quietly feuding with the GOP-controlled Legislature over who should have a say over more than $300 million intended to help homeowners.

Florida is directly receiving $334 million as part of its share of a national $25 billion settlement with five of the nation's largest mortgage lenders. This is separate from an estimated $8 billion also expected to go to help homeowners and borrowers in the state.

The settlement was announced six months ago and finalized in early April. But since then, Bondi has not announced any plans on how the state's share of the money would be spent.

That's because Bondi — the state's top legal officer — has asserted that her office can spend the money without first getting approval from state legislators.

Legislative leaders, however, contend that Florida's constitution gives the Legislature the power to make spending decisions.

"I do think it has to be authorized by the Legislature," said Sen. JD Alexander, R-Lake Wales, the Senate budget chief.

Alexander, however, said that legislators would likely "give great deference" to how Bondi wants to spend the money.

"I'm sure there would be a general desire to be respectful of Attorney General Bondi's leadership," he added.

The settlement was announced in February with great fanfare by the federal government and 49 of the nation's attorney generals. The payout settles allegations of widespread "robo-signing" of foreclosure documents and other fraudulent practices involving loans to struggling homeowners.

Florida, as one of the states hardest hit by the foreclosure crisis, received one of the largest shares of the landmark settlement.

The final wording of the settlement states that 10 percent of Florida's share shall be paid to the state as a penalty, meaning the money goes directly into state coffers. But the remaining money cannot be released unless Bondi orders it.

That hasn't happened so far because Bondi and her staff have been holding meetings with legislative staffers about the attorney general's insistence that she be allowed to spend the money without getting prior approval from the Legislature.

The ongoing tug-of-war means that it could be months before any of the settlement money is spent. The Legislature is scheduled to hold a short organizational session in November, but it is unlikely lawmakers would pass any budget-related bills until next spring.

But Jennifer Meale, a spokeswoman for Bondi, defended the possible delay.

"It is imperative that we take the time necessary to ensure that the large sum of money is used in ways that are most beneficial to Florida's homeowners and that are consistent with the terms of the settlement," Meale said.

The settlement allows the money to be spent in a variety of ways, including use on legal assistance, housing remediation or consumer protection efforts.

Other states across the country have already started spending settlement money on everything from demolishing vacant foreclosed homes to paying for mediation programs to help borrowers stay in their homes.

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