After a long battle earlier this year, a settlement was reached that issued a $26 billion payout for all the trouble surrounding the unlawful foreclosure and mortgage debt crisis. Each state that agreed to the settlement allocated a specific portion of these funds to be used to help struggling homeowners with their mortgages. However, some states have been tossing around the idea of using these funds for general budget purposes.
Fund Distribution Concerns
Arizona is one of several states who have been considering how to allocate their share of the $26 billion mortgage settlement. One idea is to use the money for non-housing purposes such as balancing the state’s budget. Doing so would allow these funds to be used for items like state government assistance checks, school and road projects and even government employee salaries. Needless to say, Arizona residents are less than pleased with the idea of using mortgage assistance funds to help float the state’s additional budget costs.
Arizona received $97 million in the way of mortgage settlement funds, $50 million of which is currently on the table for discussion about proper placement. Although many Arizona residents are not happy with the government’s consideration of these funds, the $50 million is separate from an additional $1.6 billion that was earmarked and given to the state to help underwater homeowners. However, the general consensus holds that the state should be using all of the funds to provide foreclosure counseling, loan modification help and boost housing market conditions around the state.