Rick Scott Approves Use Of Foreclosure Settlement To Help Florida Homeowners

Jun 05, 2013 | Updated Aug 05, 2013

TALLAHASSEE -- Gov. Rick Scott signed into law Tuesday a plan from a national foreclosure settlement between lenders and states that shuttles money into programs helping Florida homeowners.

"Banks will be held accountable," Scott said during a bill-signing press conference. "Florida families will be protected."

The plan covers a $200 million chunk of a $25 billion deal first announced in February 2012 that ended investigations into foreclosure abuses. Five of the biggest mortgage servicers decided to settle: Ally/GMAC, Bank of America Corp., Citi, JPMorgan Chase & Co. and Wells Fargo & Co.

Florida will spend its share on housing- and foreclosure-assistance programs, including mortgage counseling services, legal aid groups and Habitat for Humanity, according to Attorney General Pam Bondi. Lawmakers had approved the divvying-up plan (SB 1852) this legislative session.

The state's total cut is worth about $8.4 billion, including $7.6 billion in "benefits from loan modifications, including principal reduction, and other direct relief," according to Bondi's website.

Bondi, a Republican, lauded legislators for making sure the money went "to the right places" and slipped in a dig at a West Coast Democratic governor.

"I'll tell you, you know what happened in California," she said. "Jerry Brown took that money and put it right into California's tremendous budget deficit, and that's not what's happening here. The money here is going to help homeowners."

What wasn't mentioned Tuesday was the behind-the-scenes skirmishing between Bondi and the Republican-controlled Legislature.

They disagreed for the better part of a year over how the $200 million would be spent and who would get to decide. Everyone finally agreed it would go specifically to housing and foreclosure-related efforts, not into general funds. The $200 million in question is part of a $334 million payment; some of that did go to general spending.

But some had still complained that the latest money wasn't going more directly to distressed homeowners.

"It's so much money that it needed accountability," Bondi told reporters Tuesday. "It's hard to write checks just directly out there ... That's why we're going through various agencies, to ensure money goes where it's supposed to go."

Scott still has not acted on a bill (HB 87) passed this legislative session that would speed up the state's foreclosure process. Homeowner-rights groups have asked Scott to veto it.

Beginning in 2008, the national real-estate market tanked, followed by millions of foreclosures. All those new filings caused a tsunami of paperwork in the courts. By some estimates, Florida still has about a quarter of the nation's foreclosures.

Many foreclosures were tainted by "robo-signers," people who signed documents in assembly-line fashion, often without knowledge of what was in the paperwork.

Those documents included affidavits saying a bank owned the mortgage on a foreclosed home when the original paperwork couldn't be found. That led to the discovery of erroneous and fraudulent filings.

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