What do public universities and litigation over faulty drywall have in common?
Both have been deemed appropriate uses of money set aside for the states to help their citizens recover from the housing crises, according to a study by Bloomberg Government tax analyst Berenice Juarez.
The study — the second of a two-part series, “Inside the $25 Billion Mortgage Settlement” — documents how the states plan to spend $2.54 billion of the settlement set aside for them. The settlement provides $2.54 billion for housing and foreclosure prevention “to the extent practicable.”
That language leaves a lot of wiggle room for creative politicians.
Juarez reports that, while more than half of the states are using some or all of the money as intended, others are not making a good-faith effort “to follow the spirit or intent of the settlement.”
The settlement among the states and five of the nation’s biggest residential-loan servicers was intended to remediate harm that homeowners and communities suffered as a result of shoddy foreclosure practices.
A study, “Hardest Hit States to Use Settlement Money On Budgets, Not Housing,” was published Monday. Part 1 of the study, “A Preview of National Mortgage Servicing Standards,” published on June 11, outlined how the settlement probably will be a model for the servicing standards that the Consumer Financial Protection Bureau will propose for all banks.
For more information, see BGov.com.