Wednesday, May 30, 2012

New Jersey Governor Is Latest To Divert Foreclosure Settlement Aid Away From Needy Homeowners


Several states across the country, from Vermont to Wisconsin to California, have been taking some of the money they received from the foreclosure fraud settlement signed with the nation’s biggest banks and diverting it away from its intended purpose of providing relief to desperate homeowners. According to ProPublica, the total amount of money taken from the hands of needy homeowners is close to $1 billion.
Now, housing advocates are alleging that New Jersey Gov. Chris Christie (R) is doing the same thing, diverting $75 million meant to help homeowners into the Garden State’s general fund:
Affordable housing advocacy groups today said Gov. Chris Christie is misusing $75 million from a foreclosure settlement, calling his budget plan “reckless” and “a shell game.”
Christie is putting that money into the budget general fund, advocates said at a Statehouse press conference this morning, instead of specifically earmarking it to fund help for people who have been foreclosed on.
Several governors, the first of whom was Wisconsin Gov. Scott Walker (R), have used the settlement money to simply bolster their general funds, patching over budget problems that they’ve created. Progressives in New Jersey have been concerned that Christie would follow suit, and those concerns now seem to be justified. Previously, New Jersey’s attorney general had declined to confirm whether or not the state would use the settlement funding for foreclosure aid.
But not all homeowners are quietly accepting losing out on the funding. In Arizona, a group of homeowners have sued the state, saying that the diversion of settlement funds is illegal.

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