Grijalva Asks Why Brewer, Arizona Legislature Steal $50 Million From Foreclosure Compensation Fund to Make Up For Tax Cuts
Washington, D.C. – May 17, 2012 – (RealEstateRama) — Rep. Raúl M. Grijalva today called the recent move by Gov. Jan Brewer and the conservative state Legislature to swipe $50 million from a mortgage settlement fund “the best way to make sure homeowners never see the justice they were promised.”
“Families on the brink of losing their homes, their livelihoods and their American dream are apparently a lower priority than making up the cost of corporate tax cuts,” Grijalva said. State Sen. Steve Pierce recently said the intended use of the funds – prosecuting mortgage fraud and stopping foreclosures through legal assistance and housing counseling – are a “low priority.”
The settlement provided Arizona with $97.7 million to help struggling homeowners and those still facing foreclosures recoup their losses and prevent additional fraudulent foreclosures. The state legislature passed a budget that moved $50 million from the fund to cover the cost of other programs in the state budget.
“Working families were given the short end of the stick, and now Gov. Brewer and the Legislature won’t even let them have that,” Grijalva said. “This decision takes away the one chance Arizonans had to get some help navigating the banking bureaucracy that greased the skids on millions of foreclosures. It’s a clear statement of principles, that’s for sure.”
Arizona had the highest foreclosure rate in the nation in March at one out of every 300 housing units, according to RealtyTrac. Nearly half of Arizonahomesare underwater, meaning the owners owe more on the mortgage than the home is worth.
According to court settlement documents, the $97.8 million Arizona fund is for preventing foreclosures, enhancing law enforcement, prosecuting mortgage fraud and to compensate the state for losses incurred as a result of mortgage fraud. The funds can also be used to provide funding for housing counselors, foreclosure assistance hotlines, foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, training and staffing of financial fraud or consumer protection enforcement efforts and to pay civil penalties, among other uses, according to court papers.
Rep. Grijalva, as co-chair of the Congressional Progressive Caucus, hosted a hearing on the housing crisis April 26th where New York Attorney General Eric Schneiderman testified:
“The settlement is not a panacea for the foreclosure crisis… [it] is going to provide significant resources to the hardest hit communities in New York state and across the country, in the form of mortgage principal reductions, in the form of refinancing, and most immediately, in the form of legal services for homeowners who are at risk of foreclosure.”
