Foreclosure Settlement Funds Legislation Head to the Governor (Misc News: July 25, 2012)
State lawmakers were tasked with distributing $97.2 million as a result of the $25 billion settlement reached between numerous state attorneys general and the country’s five largest mortgage servicers due to improper lending and foreclosures.
Though Michigan’s share was roughly $800 million split between four different categories, slightly less than $100 million ($97.2 million) was up for appropriation by the state Legislature, of which they recently passed a spending plan that was sent to Gov. Rick Snyder on July 18.
The Senate passed out House Bill 5015 by 31-6 and then promptly returned it to the House where it was approved by 100-3. Introduced by House Appropriations Chair Chuck Moss, R-Birmingham, this bill had moved to the Senate in June as an empty vehicle measure to be used as the bill to appropriate the financial settlement fund money. Senate Bill 1160 was then introduced by Sen. Tom Casperson, R-Escanaba, to set up the Homeowner Protection Fund to be administered by the Department of Treasury in consultation with the Department of Attorney General. This bill would serve as the fund that would receive the settlement funds and would be the implementation bill for House Bill 5015. This bill was also recently ordered enrolled and sent to the governor.
During a workgroup with other financial industry and consumer advocacy representatives, the MCUL & Affiliates strongly encouraged lawmakers to focus the available funds on prevention and refinance assistance programs. Contained within the final distribution were many MCUL & Affiliates supported recommendations, which included the following highlights:
- Foreclosure Counseling and legal aid for homeowners - $15 million
- Home affordable refinance program (HARP) grants - $5 million
- Assistance to homebuyers - $15 million
- Blight elimination - $25 million
- Michigan State University extension foreclosure counseling - $5 million
- Michigan housing and community development programs - $3,709,500
For more details click here to obtain the Financial Settlement Fund Issue Brief.