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State AGs Negotiated $25B Housing Settlement at Risk

Will NJ’s $72 Million Share
Go to Affordable Housing?

Attorney General Jeffrey Chiesa On May 15, 2012, The New York Times reported on a $25 billion national settlement negotiated by banks over the abuses in mortgage and foreclosure processes. It is the first commitment of its size on the part of banks to directly assist borrowers affected by the housing crisis.

The article lays out findings that, “Needy States (Are) Using Housing Aid Cash to Plug Budgets.” Quoting from the article:

“The $2.5 billion was intended to be under the control state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude.”

According to a report by Enterprise Community Partners, New Jersey is one of 27 states that will use “substantially all of the funds for housing.” New Jersey’s Attorney General Jeffrey Chiesa has said that the state’s portion of the settlement, over $72 million, will be “used for various state affordable housing programs.”

But the report indicates concerns that the “Governor will try to divert funds to (a) new purpose.”

Click here to read the full NYT article.

by Kate M. Kelly

Kate Kelly joined Monarch Housing Associates in March of 2011. Her responsibilities include writing policy and other website updates, coordinating state and federal advocacy update and assisting with fundraising efforts. To read more about Kate and all of our staff click here. Click here to send Ms. Kelly an email.

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