Gray Rohrer, 03/27/2013 – 03:10 PM
Members of the Senate Appropriations Subcommittee on Transportation and Economic Development unveiled their plan to spend $200 million from a multi-state foreclosure fraud settlement on Wednesday, revealing a significant departure for the House.
The Senate wants to use $70 million for the State Housing Initiatives Partnership program, which provides grants to local governments to pay for affordable housing and its refurbishment and maintenance. The House’s plan does not include any money for SHIP, which also helps low-income households purchase existing homes and provides housing counseling.
The Senate’s SHIP plan would be tailored to special needs applicants, with 20 percent of the money going to aid disabled people. The upper chamber also gives $65 million to the State Apartment Incentive Loan program, with 15 percent of those funds going to units designed for disabled residents. The House provides $50 million to SAIL, with half going to reduced rents and low interest loans for low income residents and the other half going to qualified elderly applicants.
The House plan would give $45 million to the Florida Housing Finance Corp. (which administers the SHIP and SAIL programs) for down payment assistance for teachers, assistant state attorneys and public defenders, veterans and military service members and medical professionals. The Senate does not include down payment assistance in its plan.
Both chambers want to spend part of the settlement money to reduce the foreclosure backlog in Florida, where it takes more than 800 days for the average foreclosure to make it through the court system. The Senate gives $25 million over two years to the State Court System to pay for retired judges to help rip through backlogged cases. The House gives $13 million for one year. Clerks of the court would receive $15 million over two years in the Senate proposal, $6.7 million for one year from the House.
Legal aid programs providing counseling to homeowners in foreclosure or at risk of foreclosure would get $10 million from the Senate, $5 million from the House.
The House also gives $35 million to the nonprofit Habitat for Humanity to construct new homes and rehabilitate existing homes for low income families and provides $20 million to theDepartment of Children and Families to increase capacity and expand services for domestic violence centers and emergency shelters. The Florida Prepaid Foundation gets $15 million in the House plan to add a two-year dorm option to prepaid tuition plans. None of those provisions are included in the Senate plan.
The settlement money is part of a $25 billion multi-state settlement with five of the nation’s largest banks – JP Morgan, Bank of America, Wells Fargo, Citigroup and Ally Financial – for suspicious foreclosure practices after reports surfaced in October 2010 of law firms churning out fraudulent or shoddy documents proving ownership of a mortgage.
Florida’s take in the settlement was $8.4 billion, $7.6 billion of which went to loan modifications, principal reductions or loss reductions from short sales. The rest went to relief for homeowners with underwater loans — those owing more on their home than it is worth — direct payments to those who lost their home in defective foreclosure cases. The state received a $334 million in a direct payment, $74 million of which went to general revenue as a civil penalty and $60 million of which has already been disbursed by lawmakers for FHFC services, legal aid and additional court resources.
The remaining $200 million is to be appropriated by lawmakers this year. Attorney General Pam Bondi, who was part of settlement negotiations, wrangled with legislative leaders last year over how to spend the money. In a statement, she said she will continue to work with both chambers.
“I thank the Senate Subcommittee for their hard work on this good legislation, and I look forward to working with the House and Senate on a final product that uses the mortgage settlement funds to help Florida’s homeowners and to ameliorate the foreclosure crisis in our state,” Bondi said.
The House plan is filed as HB 7111, but hasn’t received committee references, and the Senate version is a proposed committee bill that has yet to be filed.
|Foreclosure Settlement Money Plans|
|Down payment assistance||$45 million||–|
|SHIP program||–||$70 million|
|SAIL program||$50 million||$65 million|
|Florida Prepaid Foundation dorm plan||$15 million||–|
|Homeless housing program||–||$10 million|
|Legal aid||$5 million||$10 million|
|State Court System (total)||$18.3 million||*$25 million|
|Clerks of Court||$6.7 million||*$15 million|
|Domestic violence program expansion||$20 million||–|
|Habitat for Humanity||$35 million||–|
|Administrative costs||$3 million||$3 million|
|Attorney General marketing campaign||$2 million||$2 million|
|Total||$200 million||$200 million|
|*Money would be disbursed over two years|
Reporter Gray Rohrer can be reached at firstname.lastname@example.org.
LANSING (WKZO) — Michigan will get 2.5-million dollars in a foreclosure document fraud case.
On Thursday, the state’s Attorney General’s Office announced that Michigan will receive the money following the settlement of a case involving a woman accused of forging more than one-thousand documents in Michigan home foreclosures. Lorraine Brown, the former president of a Georgia document preparation company, was charged in November with racketeering.
Brown’s company has since gone out of business, however its parent company has been ordered to pay Michigan 2.5-million dollars in damages and must also set up a hotline and program to correct documents for Michigan homeowners.
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