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Realtors react to Brown’s plan for mortgage money

Posted: May 30, 2012 1:55 a.m.
Updated: May 30, 2012 1:55 a.m.

Gov. Jerry Brown wants to take all of the money from April’s  $2.5 billion mortgage settlement to offset the state’s multibillion-dollar deficit, according to his revised May 15 budget.

In the settlement, the country’s five largest banks agreed to pay states to help homeowners in foreclosure.

The governor’s revised budget proposal calls for the proceeds from the recent national mortgage settlement to address an estimated $15.7 billion budget shortfall.

Divvied up among the states’ attorneys general according to how large the states were and how hard they were hit by the crisis, California received more than $410.6 million, or 9.41 percent of the overall settlement monies.

California was one of the hardest hit states during the real estate crash, but not a penny of the settlement has gone to help homeowners, according to records at Propublica, an independent, nonprofit news organization.

“It really doesn’t matter what we vote on, the governor will take it for whatever he wants,” said Dwight Hawkins of  Realty Executives in Valencia. “That’s why you will probably see a lot of No’s on the ballot, but I could be wrong.”

Brown proposed to use the funds to offset existing general-fund costs for assisting homeowners and protecting consumers, rather than creating new programs so the “state can be returned to fiscal stability.”

The governor’s proposal must first be passed by the Legislature. California Attorney General Kamala Harris is opposed to the move, according to the San Francisco Chronicle.

“It will remain to be seen how much authority Kamala Harris will actually have regarding this matter and if she can change the governor’s mind,” said Kathrine Salisbury with Triple D Realty in Stevenson Ranch. “It seems to be up to the legislature.”

The money was meant to help homeowners in the hardest-hit areas, and Harris wants the funds to be used for housing agencies, outreach and education, an independent monitor who can make sure banks comply and then direct assistance to borrowers to help with transition costs, Salisbury said.

“Because Harris wants some of these proposals to be passed, she may give in to Governor Brown’s budget plan and divert some money from the National Mortgage Settlement,” she said.

Some analysts will say, the budget needs to be balanced before the state can help homeowners, Salisbury said. But as a Realtor working with homeowners every day, she believes the money allocated to struggling homeowners needs to be used for exactly what it was intended for.

“Let Kamala Harris continue with her fight for homeowners and use the money where she sees fit and hopefully some homeowners can be helped,” she said.

“Nothing is a ‘cure-all’ for homeowners, but every little bit helps and we should follow what the majority of states are doing with the money,” she added. And that’s keeping it for its intended purpose and not diverting money to other budget matters.”

Still, even if the funds remain intact for their intended purpose Salisbury said there needs to me more outreach and help for homeowners so they can make informed decisions.

“As real estate agents we try to help and inform struggling homeowners at no charge,” she said. “Unfortunately, this type of marketplace brings out a village of people who just want to take advantage of struggling homeowners and some pay huge amounts of money to people who don’t help them in the end.”


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