Missouri Becomes Second State To Divert Foreclosure Funds Away From Homeowners To Balance Its Budget

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http://thinkprogress.org/economy/2012/02/13/423677/missouri-foreclosure-settlement-budget/

Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.

Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget, Stateline reports:

'Koster, a Democrat, told reporters on Thursday that he agrees with the governor’s call for more higher education funding and will transfer the $40 million Nixon has requested into the general fund, citing the “severe budget shortages” the state faces.'

Though specific terms of the settlement have not been released, states have been given significant leeway on how to spend the money from it. According to the National Mortgage Settlement website, however, the money is supposed to “help fund consumer protection and state foreclosure protection efforts.” The full $26 billion, though, is already woefully short of what is needed to ameliorate the nation’s housing crisis, and diverting funds from it to other problems will only exacerbate that fact.

[Fawke Em]

1. Maybe I'm missing it, but has it been explained how this

is even legal?

It looks as though, if the money is earmarked for certain things, that it can't be used for something else.

[tsuki]

9. The money is being given to the states with a

suggestion of how it should be spent.

[nanabugg]

2. People who own or who are trying buy a home usually vote.

This info should be a warning to home buyers trying to stay above board or trying to climb out of the hole. The GOP doesn't really care about them.

[WCGreen]

6. Apparently some democrats don't care about home owners in trouble...

[atreides1]

3. Another free give away

Didn't anyone think of putting restrictions on how this money was to be used?

So home owners were only used as a means to garner support for this agreement...I don't believe this money was ever truly intended to help those who needed it...just another way for states to get cash to close their budget shortfalls.

I wonder did any of the States Attorney Generals kiss the suffering homeowners before they decided to fuck them?

[tsuki]

10. Schneiderman, for one.

[Rambis]

4. They hate the government but they will take handouts from it to plaster over their failed policies?

[uponit7771]

7. DNC gets really quite about conservative hypocrazy, to America's detriment

[LiberalFighter]

11. quite?

[SoCalDem]

5. It should be issued in voucher form ONLY to be used for the intended purpose

bastards

[Marrah_G]

8. It is infuriating

[stockholmer]

12. I said it was a shite deal form the beginning, and it just gets worse, stab in the back redux