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FBN’s Gerri Willis on many states using money from a mortgage fund to plug holes in their budget rather than to prevent foreclosures.
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California governor Jerry Brown has a secret weapon in his spiked to close the State's unbelievable sixteen billion dollar budget gap.
Yes he's doing the usual things politicians do.
He's raising taxes and he's even making some budget cuts but to make ends meet he's tapping into a 400 million dollar slush fund.
Provided by the nation's biggest banks.
Now course that's not what the money was meant for.
Earlier this year the country's five biggest banks reached -- 25 billion dollar settlement with the fifty states over abuses in their mortgage and foreclosure process -- if you're a member robo signing.
Well most of the settlement money is coming from writing down mortgage debt -- two and a half billion is cash.
Earmarked for the states to prevent foreclosures investigate fraud and lessen the impact of the housing crisis.
California's not alone and that's only half the State's 27.
Are using the funds as it was intended.
At a 23 have found this windfall to attempting to pass -- -- dipping into it like California to plug holes in their budget.
Some states are getting creative Georgia plans to use that shared 99 million dollars to attract more business to the state and here's the reasoning.
The Georgia governor's office says job creation is the best way -- save honest homeowners from foreclosure.
Make some sense.
But other states like Missouri the show me state should change its name to the shameless state.
It's forty million dollar payout is going to make up for cuts that previously -- date were previously made to higher education.
Virginia using most of its 67 million to bail out local governments deep in debt.
Lot Texas is depositing it's 125.
Million right into the general budget.
This is the State's second largest settlement ever.
-- like this don't happen.
Instead of using the money is intended to short the nation's troubled housing market if it could politicians are exploiting -- so they can put off making tough budget decisions.
What are they gonna do next year -- someone else's problem -- -- Look my injection.
Objection to the settlement is this it delayed any recovery in the housing market because banks didn't want to lend without knowing how much -- be on the hook for in a settlement.
Just as bad a slew of folks who should have lost their homes because they weren't paying their mortgage -- analysts squad in those homes for months on -- living rent spree.
And none of this help the average homeowner who was faithfully paying their mortgage because there was no recovery in housing prices -- the markets seized up.
Sellers and buyers alike state now.
Look here's the real problem with the management of the settlement nobody here seems to be looking out for the homeowner and I mean the homeowner -- was paying his or her mortgage and owes more than their home is worth this is a tragedy.
Given government out of the way and let the market recovered.
