In a big win for California homeowners, the state Supreme Court upheld lower court rulings that direct the state to return $331 million it diverted from Californian’s with mortgages hurt by negative lending practices during the economic downturn.
In 2012, California received $410 million from a lawsuit involving the nation’s five largest mortgage services – Ally – formerly GMAC, Citigroup, JPMorgan Chase, Wells Fargo and Bank of America, all of which had been charged with multiple federal lending violations. The settlement was intended to provide funding for legal aid, foreclosure hotlines, consumer education and efforts combating financial fraud. However, the state of California decided to divert $331 million to pay off unrelated debts, including housing bonds, which in some cases were enacted more than 10 years before the 2012 mortgage settlement. A coalition that included representatives of the Asian-American and Latino communities sued California and won in two court cases, but delays continued. The Legislative majority even passed a bill, Senate Bill 861, and attempted to block the court rulings that benefited homeowners.
Thousands of homes were lost while the state was trying to justify its illegal diversion of funds. California has a surplus of over $20 billion and a rainy day fund of over $19 billion, but the state still tried to divert money aimed at helping people threatened with losing their homes. It is totally unacceptable. And now that the state Supreme Court has spoken, California must come into full compliance with court mandates.
Last month, I sent a letter as Assembly Republican Leader and the Senate Republican Leader, which can be seen at https://bit.ly/2zbw5wI, to Gov. Gavin Newsom requesting full details of his plan to bring California into compliance with the court rulings. In a matter that impacts so many homeowners, full disclosure and transparency are not negotiable.
Assembly Republican Leader Marie Waldron, R-Escondido, represents the 75th Assembly District in the California Legislature, which includes the communities of Bonsall, Escondido, Fallbrook, Hidden Meadows, Pala, Palomar Mountain, Pauma Valley, Rainbow, San Marcos, Temecula, Valley Center and Vista.