Tuesday, May 1, 2012

Arizona lawmakers target mortgage settlement

Arizona lawmakers say they need $50 million from a mortgage settlement to pay for other pressing state needs, even as housing advocates say they may sue if the Legislature takes the funds.

Legislative leaders say their proposal for the fiscal 2013 budget will not deprive relief to victims of the foreclosure crisis: Those needs will be covered by $1.5 billion from the settlement fund, according to state budget staffers. Arizona posted the highest foreclosure rate in the nation in March, the most recent month for which statistics are available, with 9,497 foreclosures, according to RealtyTrac.

The $50 million will come out of an additional $97.7 million in settlement funds overseen by Arizona Attorney General Tom Horne's office. Horne's website says that money is to be used for "state foreclosure prevention programs, Attorney General Office costs and fees, and to remediate the effects of the foreclosure and housing crisis in Arizona."

The settlement language calls for the $97.7 million to be used, among other things, for housing counselors, legal aid, hotlines and to help stressed homeowners with their payments.

Lawmakers say the money amounts to a pricey outreach and education fund. It won't hurt to take half of it, House Speaker Andy Tobin said.

"We're using the funds to relieve the pressure on the budget," said Tobin, R-Paulden. Those stresses range from a push to replace welfare dollars lost to federal budget cuts to prison construction, he said.

Tobin disputed claims from housing advocates that the money would be used to build private prisons. The $50 million goes into the general fund and is not earmarked for a specific program, he said.

The budget includes $50 million over the next two years for 500 maximum-security beds, but those beds would be built and overseen by the state, not private contractors.

The Arizona Housing Alliance said it is considering a lawsuit to stop the fund transfer. The Homeowner Advocacy Unit at Arizona State University's Sandra Day O'Connor College of Law has joined in the effort to monitor the use of funds.

The housing alliance estimates that $50 million could provide 75,000 troubled homeowners with housing counseling and 10,000 homeowners with legal assistance.

Senate Majority Leader Andy Biggs, R-Gilbert, said many of the states benefiting from the mortgage settlement have put the dollars into their general funds.

by Mary Jo Pitzl - Apr. 30, 2012 09:28 PM The Republic | azcentral.com

Arizona lawmakers target mortgage settlement

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