The mortgage foreclosure fiasco has turned out to be a bonanza of sorts for Mississippi state government.
Mississippi’s general fund will receive a $7.7 cash infusion from the national legal settlement state Attorney General Jim Hood and 48 other attorneys general negotiated with giant mortgage servicers Bank of America, Citi, Chase, GMAC and Wells Fargo.
The financial companies were forced into the settlement after widespread fraud and abuse was discovered in their mortgage foreclosures practices, including “robo-signings” by which untrained employees signed foreclosure documents without ensuring their companies even owned the mortgages.
Mississippi’s discretionary portion of the settlement comes to $13.5 million. State legislators could have kept the whole allocation to plug budget holes but agreed to allocate $5.8 million to help homeowners avoid foreclosure, including counseling and education programs and creation of a foreclosure hotline.
Here’s a rundown on the distribution of the remaining money:
>> $1,920,000 to the Mississippi Center of Justice, North Mississippi Rural Legal Services and the Mississippi Center for Legal Services for the creation of a Foreclosure Legal Assistance Project;
>> $944,343 to Money Management for the creation of a Homeowner Hotline, toll-free hotline that would serve as an initial point of contact for distressed homeowners who are seeking to qualify for assistance;
>> $2,144,065 to the Mississippi Home Corporation for 10 housing counselors statewide, pre-purchase education and individual one-on-one housing counseling, budget planning around home purchase decision, and media advertising;
>> $500,000 to the Mississippi Veteran’s Home Purchasing Board/Military Relief Fund for veterans housing assistance programs; and
>> $381, 927 to the Office of the Attorney General to administer and audit the monthly reimbursement requests over a three-year period.
The $5.8 million is to be spent over a three-year period. Any money not spent by then must be returned to the general fund, according to the Attorney General’s office.
The Mississippi Center of Justice and the North Mississippi Rural Legal Services said it is not prepared to discuss what it hopes to accomplish with the $1.9 million Foreclosure Legal Assistance Project or how it intends to structure it.
Kathleen Day, spokeswoman for the Washington, D.C.-based Center for Responsible Lending, said Mississippi homeowners are fortunate the state is not following the lead of states such as Georgia and California, where state leaders have diverted the entire amounts of the discretionary settlement money for non-foreclosure related purposes.
“Gosh knows it’s not much but at least it’s something,” Day said of the Mississippi allocation.
http://msbusiness.com/2012/05/state-grabs-7-7m-of-foreclosure-settlement/
- added by: JohnA
- johna posted Mississippi, California, make Money Grab, keep Settlement Money for Themselves. 3 days ago
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