Misappropriate – Mortgage Settlement Money Going to WI Gen Budget

Governor Scott Walker and Attorney General J.B. Van Hollen aren’t the first public officials to take money intended for one purpose and use it for another.  In the case of the national mortgage fraud settlement money funding for Wisconsin, part of a settlement already grossly inadequate for helping provide restitution to victims, it will be largely or even entirely sucked into the state general budget to fill budget holes.

David Dayen has been covering the mortgage fraud story nationally, and the Journal Sentinel has local coverage as does Think Progress.

As much as blame rests with Walker and Van Hollen (who deserve their share) – how is it that the Obama Administration settlement, supposedly crafted to provide a measure of justice to homeowners suffering real and devastating harm from fraud, permits states to take a more than half of the “hard” money involved ($2.75 billion of $5.25 billion) and use it for anything they desire? Talk about insult to injury!

If Wisconsin’s GOP leadership did this in their political wisdom, why wouldn’t we think other states will follow? As Dayen tweeted today (@ddayen) “Wisconsin will use foreclosure fraud settlement money to plug their budget hole http://t.co/SnbcVUrS I guarantee you Florida’s next.”  The fraud continues – both what we know of the settlement, and the lack of transparency of terms and accountability, leads to the destruction of faith in equal justice and our form of government. I would have guessed that political self-preservation would have dictated a different course for President Obama. I remain amazed.

 

[Editor Note: The "terms" link above was added after the post - apparently there are no "inked" terms at all, so what's written above is based on what was reported, not what was agreed to in final, which as of now is nothing as I understand it. So basically what the Obama Administration proposes as a settlement (a high water mark as it were) sucks for the victims of fraud - and it isn't even yet accepted.]