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Arizona Legislature takes $50 million from the state’s share of a nationwide mortgage fraud settlement to balance the budget rather than helping homowners.

This was money intended to help families who were losing their homes to foreclosure.

According to the Arizona Supreme court the Arizona Legislature did nothing wrong in seizing $50 million from the state’s share of a nationwide mortgage fraud settlement to balance the budget, as reported in the Arizona Daily Star.  The justices upheld lower-court rulings that nothing in the national settlement agreement signed by Attorney General Tom Horne required him to spend the money only on services that benefit homeowners, including those in danger of foreclosure.

This money should have been spent on people with foreclosure problems instead of going to the general fund.

foreclosureAttorney Tim Hogan of the Arizona Center for Law in the Public Interest, who sued to block the move, called Tuesday’s ruling “unfortunate.”  “There’s still a ton of people that could have benefited from this money that rightfully should have been spent on people with foreclosure problems instead of going to the general fund,” he said.

And Hogan said the irony is that lawmakers, in demanding the cash last year, insisted they needed it to balance the budget. But by the time the fiscal year ended on June 30, the state had a surplus of nearly $900 million.

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Diane L. Drain

Diane L. Drain, bankruptcy attorney, retired law professor, mentor and community spokesperson.

About Diane Drain:

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