Gov. Scott Walker To Use Foreclosure Settlement Money To Balance His Budget, Not Help Homeowners! [View all]

[Better Believe It]

Gov. Scott Walker To Use Foreclosure Settlement Money To Balance His Budget, Not Help Homeowners
By Pat Garofalo
February 10, 2012

Wisconsin Gov. Scott Walker (R) — whose high profile assault on workers’ rights has prompted a recall effort against him — isn’t planning to use the money to help homeowners. Under the terms of the settlement, Wisconsin is set to receive $140 million, $31.6 million of which comes directly to the state government. And Walker is planning to use $25.6 million of that money to help balance his state’s budget:

Of a $31.6 million payment coming directly to the state government, most of that money – $25.6 million – will go to help close a budget shortfall revealed in newly released state projections. [Wisconsin Attorney General J.B. Van Hollen], whose office said he has the legal authority over the money, made the decision in consultation with Walker.

“Just like communities and individuals have been affected, the foreclosure crisis has had an effect on the state of Wisconsin, in terms of unemployment. … This will offset that damage done to the state of Wisconsin,” Walker said.

A memo from Wisconsin’s Legislative Fiscal Bureau released yesterday notes “it is anticipated that Wisconsin will receive $31.6 million. Based on discussions between the Attorney General and the administration, of the amounts received by the state, $25.6 million will be deposited to the general fund as GPR-Earned in 2011-12, and the remaining $6 million will be retained by the Department of Justice to be allocated at a later date.”

Read the full article at:

http://thinkprogress.org/economy/2012/02/10/422744/walker-settlement-budget/


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Missouri Becomes Second State To Divert Foreclosure Funds Away From Homeowners To Balance Its Budget
By Travis Waldron
February 13, 2012

Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.

Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget, Stateline reports:

Koster, a Democrat, told reporters on Thursday that he agrees with the governor’s call for more higher education funding and will transfer the $40 million Nixon has requested into the general fund, citing the “severe budget shortages” the state faces.

And while Nixon and Koster’s plan to boost higher education funding, which faces a 12.5 percent cut in Nixon’s proposed budget, is certainly a noble goal, there are other sources from which the money could come that wouldn’t jeopardize relief from homeowners. As the St. Louis Post-Dispatch pointed out in January, Missouri has a “propensity to hand out tax credits like legislative candy along a parade route.” Ending the credits, many of which go to corporations, could generate more than $500 million in new revenue, more than enough to restore the higher education budget without taking money from programs meant to help struggling homeowners.

Read the full article at:

http://thinkprogress.org/economy/2012/02/13/423677/missouri-foreclosure-settlement-budget/


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Maine Becomes Third State to Divert Foreclosure Fraud Settlement Cash into General Fund
By: David Dayen
February 13, 2012

You can now add Maine to the roster of states planning to use at least some of the money distributed by the five leading banks as part of the foreclosure fraud settlement for the purposes of patching up its budget rather than helping homeowners.

Contacted late Thursday, Attorney General Schneider said the $8.2 million will be carved up three ways — $500,000 for Pine Tree Legal, $2 million for the Maine Bureau of Consumer Credit Protection, and $5.7 million for the general fund.)

So that’s $5.7 million out of the $8.2 million direct payment to Maine, or 70% of the proceeds, going to the general fund. And Pine Tree Legal, which as Cox says has one paid staff attorney for foreclosure efforts will get 11 times less the amount that the general fund will get to plug their budget hole.

That’s essentially a license for states to take the money as a “penalty” and put it into their general funds. Three out of 50 have already done so. We’ll continue to track who else will engage in this, and clearly there will be more. You honestly think Rick Scott or Rick Perry won’t use this money to plug their budget holes?

Read the full article at:

http://news.firedoglake.com/2012/02/13/maine-becomes-third-state-to-divert-foreclosure-fraud-settlement-cash-into-general-fund/

BBI. You may also want to read the article "Mortgage settlement is great — for politicians and banks" posted at:

http://www.democraticunderground.com/1002308378