Last week, the Florida Legislature committed over $140 million from the settlement to a host of state programs aimed at preventing future foreclosures and boosting communities struggling from the foreclosure crisis.
Texas turns its back on foreclosure victimsBy , For the Express-News
Updated May 9, 2013 5:34 p.m.
New York Attorney General Eric Schneiderman recently announced his intentions to sue Bank of America and Wells Fargo for circumventing their obligations under last year's National Mortgage Settlement Agreement.
That leaves Texas. Texas is the last state that participated in the lawsuit to determine how to spend its $134 million share of the settlement funds. And it appears not a single penny will be designated for its intended use — to keep hardworking people in their homes and stabilize neighborhoods. Instead, legislators are expected to use all of it for general state funding before the legislative session ends May 27. The $134 million is Texas' share of $2.5 billion in direct state payments stemming from the historic National Mortgage Settlement, whereby 49 State Attorneys General and the nation's five largest banks agreed to settle on charges of fraudulent foreclosure practices. Texas received the third largest of all state payments, behind only California and Florida, because of the extent of the damage Texans endured. This move by the Legislature will put it among the worst settlement violators. Georgia, despite being among the hardest hit, used its $99 million for corporate tax incentives; South Carolina used $10 million to give tax incentives to large corporations and put the rest of its $31 million into its general fund; Missouri initially made large cuts to higher education, but used all of its $40 million settlement to fill the gap; New Jersey used creative accounting to put its money into the general fund. Texas had the fifth highest number of completed foreclosures for the 12 months ending in March, according to a report by CoreLogic. Some 53,000 Texans lost their homes to foreclosure over the past year. This alarming rate, combined with high mortgage delinquency rates and chronically low credit scores, signals the foreclosure crisis here is far from over. State Sen. Eddie Lucio, D-Brownsville, and Rep. Sergio Munoz, D-Palmview, tried to direct a portion of Texas' settlement to help the families and neighborhoods ravaged by the foreclosure crisis. They filed legislative riders proposing to finance an affordable housing trust fund, provide homeless services and prevention, and assist veterans with repayable loans, foreclosure assistance, and affordable housing. The fact that those riders quickly died in the budget negotiation process is not only disappointing, it's shortsighted. The reason the banks agreed to this settlement is because of the real damage that they did to people living in Texas and around the country. It is only right, then, that these funds be used to help the damaged parties. Texas legislators still have an opportunity to put settlement dollars into programs that make a difference to the people injured by the foreclosure crisis. It benefits all Texans to keep hardworking families in their homes, stabilize neighborhoods and address blight that drags down home values and economic growth. Texas' ongoing mortgage crisis is a drain and settlement funds offer stop-gap cash that does not come from taxpayers. Unfortunately, the Legislature seems poised to turn its back on this opportunity.
Frank Woodruff is director of the National Alliance of Community Economic Development Associations. |