Skip to main content

California Dems Rush to Overturn Court Ruling on Foreclosure Settlement Funds

Phil Hall
Aug 20, 2018

 
 
Democratic legislators in California are scrambling to create a new law that will void a recent court ruling that mandates the state use $331 million from a 2012 nationwide settlement with major mortgage servicers to aid homeowners impacted by abusive foreclosures.
 

According to a San Francisco Chronicle report, a state appeals court in Sacramento ruled last month that Gov. Jerry Brown improperly channeled the $331 million settlement into paying off the deficits of agencies responsible for state housing bonds and consumer programs. Although the state legislatures approved the funds allocation over the last three years, the court ruled that the state spend the funds on programs directly assisting foreclosed homeowners.
 

Joshua Gauger, a budget analyst with governor’s Finance Department, told the California Senate Budget and Fiscal Review Committee last week that the state did the right thing in not giving the funds to impacted homeowners. “In the heart of the recession, the state did the best it could in allocating money toward housing measures,” Gauger said.
 

The legislature’s Democratic-controlled Assembly and Senate have voted to send their respective versions of the legislation to the floor of each chamber for a full vote. The deadline for final passage is Aug. 31. Neil Barofsky, an attorney representing a coalition of organizations that questioned how the state used the funds, promised legal action if the legislation passes. Barofsky said that the “attempts to somehow retroactively endorse” the state’s use of the funds will not work because “those actions were still illegal, and the governor remains under an obligation to use the National Mortgage Settlement Funds as the appellate court found they were intended—to help struggling homeowners.”
 
 
Published
Aug 20, 2018
CFPB Reports Trends In Financial Assistance

The latest developments from this study reveal that most consumers have exited the payment assistance they received at the start of the pandemic.

Analysis and Data
Jul 14, 2021
CFPB Orders GreenSky To Refund $9M In Unauthorized Loans

The consent order requires GreenSky to refund or cancel up to $9 million in loans for the customers harmed by this illegal conduct.

Regulation and Compliance
Jul 13, 2021
CFPB Warns Landlords And Consumer Reporting Agencies To Report Accurate Rental Information

Inaccurate rental or eviction information can unfairly block families and individuals from safe, affordable housing.

Regulation and Compliance
Jul 01, 2021
FHFA Mandates Quarterly Fair Lending Reports

FHFA issued orders for all enterprises to submit quarterly Fair Lending Reports with data and information to improve the FHFA’s capabilities. 

Regulation and Compliance
Jul 01, 2021
FHFA Follows CFPB To Protect Borrowers Once COVID-19 Foreclosure And Eviction Moratoriums End

The Federal Housing Finance Agency made it clear that Fannie Mae and Freddie Mac servicers are not permitted to make first notice or filing for foreclosure that would be prohibited by the CFPB protections for borrowers affected by COVID-19.

Regulation and Compliance
Jun 30, 2021
CFPB Finds Evidence Of Redlining And Deceptive Acts In 2020

Enforcement actions resulted in more than $124 million in consumer remediation and civil money penalties in 2020

Regulation and Compliance
Jun 29, 2021