California GOP Seeks Answers About Misspent Housing Funds
Sacramento, CA — The Republican leaders in the Senate and Assembly are calling for Governor Gavin Newsom to submit a plan detailing how mortgage settlement funds will go to those in need.
Last week the California Supreme Court ruled that the state inappropriately spent $331-million that had been received in settlement money paid by large banks and lenders in 2012. The money was supposed to go towards statewide homeowner assistance efforts. However, the money was used during the recession to help balance the state budget and pay off housing bonds enacted before the housing crisis.
The actions were taken during the administration of Governor Jerry Brown, prior to Newsom taking office. Newsom’s administration responded to the ruling by stating it will begin the work of transferring the $331-million back into a special fund that will help homeowners hit hard by the mortgage crisis, but no details were released.
GOP Senate Leader Shannon Grove and Republican Assembly Leader Marie Waldron have sent a letter asking that Newsom explain how the process will work. They write, “The court’s decision is unambiguous. The state must return this money to the mortgage fund so it can be used on behalf of distressed homeowners. Many homeowners are struggling in an economy that has seen inconsistent growth and still feel the effects of the recent recession and downturn in the housing market. This funding will allow thousands of homeowners statewide to stay in their homes by preventing unnecessary foreclosures.”