EDITORIAL: Keeping housing funds in order

November 12, 2012 | Tampa Tribune

An agreement between Florida Attorney General Pam Bondi and lawmakers should ensure the bulk of the state’s mortgage settlement goes to deserving Floridians.

Still, voters should keep an eye on the Legislature and make sure it doesn’t divert the $334 million settlement to members’ pet projects.

The money in question is part of the $25 billion national settlement with the nation’s five largest mortgage lenders — Wells Fargo, JP Morgan Chase, Bank of America, Citigroup and Ally Financial — over foreclosure abuse and irresponsible servicing practices.

Offenses included “robo-signing,” where documents were signed by lending officials without attempts to validate the information.

The money is intended to provide relief to homeowners struggling with mortgage payments, individuals who have lost their homes to foreclosure and those trying to refinance underwater homes and such.

Florida is receiving $7.5 billion that will go directly to affected homeowners. The $334 million settlement goes to the state.

Bondi and lawmakers had differed on how the money should be handled. Lawmakers insisted it be allocated through the Legislature.

The attorney general did not want the money to go into the general revenue fund, where it could be used for any purpose and not necessarily go to housing programs. Such diversions have occurred in other states.

Bondi eventually went along with lawmakers, but only after receiving a promise from incoming House Speaker Will Weatherford and Senate President Don Gaetz last week to allocate about $200 million next session for foreclosure prevention, neighborhood revitalization, affordable housing, renter assistance and other housing-related issues.

Bondi expects another $60 million to be allocated for housing initiatives before the end of the year.

About $74 million will end up going into the state general revenue.

Though much could happen before the session, Bondi has confidence in Weatherford and Gaetz.

We know Weatherford, whose Pasco district has been hard hit by the mortgage mess, understands the importance of helping financially battered homeowners get back on their feet.

Still, broken promises are hardly uncommon in Tallahassee.

Voters should keep an eye on developments to see whether lawmakers make good on their word.