The only state we know of SO FAR to have diverted funds… How many of us from Maine to Hawaii have seen any of those funds put to use for desperate homeowners? Certainly not funding or training legal aid, the judiciary or counseling services, are they?!
Lead counsel Neil Barofsky, the former Special Inspector General of TARP, and is firm doing this case pro bono, with the potential provision of fees by the court if they win the case.
From freelance writer David Dayen of Naked Capitalism:
Late on Friday, a coalition of African-American, Latino and Asian-American groups sued California Governor Jerry Brown, demanding that he return $350 million stolen from the state’s share of the National Mortgage Settlement to plug a budget hole.
California is far from the only state to divert money given as a penalty for homeowner abuse into the General Fund; in fact, less than half of the $2.5 billion given to states in the settlement actually went to housing (and that’s a generous rendering which counts things like North Dakota spending to increase housing stock in oil country for police officers, when that has nothing to do with compensation for abuse)…
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