Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Not all $25B mortgage settlement dollars being used for housing issues

After a long contentious battle between state governments, the federal government and the five largest mortgage servicers, another battle now has observers baffled.

College Debt and Housing

College Debt and Housing

States not using funds on housing

A new study by the Enterprise Community Partners, entitled “States Fall Short on Help for Housing: Six Months after Mortgage Settlement, Less than Half of States’ $2.5 Billion Has Gone for Housing” reveals that not all dollars states are receiving from the massive national mortgage settlement payout are going toward housing issues, in fact, some funds are being used for general budget shortfalls.

Earlier this year, 49 state attorneys general and the federal government settled with the nation’s five largest mortgage servicers for foreclosure abuses, particularly robosigning of documents without human review prior to repossessing homes. Fully $2.5 billion was to go directly to states to use toward foreclosure prevention programs, prevention and prosecution of mortgage fraud, and community stabilization measures. This new report shows that less than half of this amount will be used as outlined in the settlement, as some states are choosing to use the funds for non-housing issues.

mortgage settlement by state

Biggest offender: California

While $588 million has yet to be allocated to the states, $966 million has been slated for housing activities, but a staggering $988 has been put into states’ general funds for non-housing issues, according to the report. Settlement funds have already begun being used for housing activities in Connecticut, Ohio, and Tennessee as agreed upon in the settlement.

Most states have plans for the funds that do not deviate from the original settlement agreement, but Florida and Texas are not sticking to putting the funds completely. Along with California, these are three of the largest recipients of the settlement funds. More egregious than those two states are Alabama, California, Georgia, Missouri, New Jersey, and South Carolina, all six of which plan to use zero percent of the funds on housing.

The report notes, “Despite the central role of the attorneys general in negotiating the settlement, including the stipulations of how they will use their share of the funds, legislatures and governors have often weighed in heavily on how the funds will be spent. This has led to some very public disputes over who has the actual authority to allocate the money.”

Advertisement. Scroll to continue reading.

Look for this to be a continuing contentious issue for months to come as settlement funds are negotiated, used, or misused.

Full report:

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.



  1. Barbara Mosher

    October 24, 2012 at 2:06 pm

    duh. No one has used the funds as they were designated, most importantly the banks.

  2. Jamie Roy

    October 24, 2012 at 3:43 pm

    oooh what a surprise- they never intended on using the money to homeowners. the settlement was never ever about homeowners it was about getting every cash strapped state in the US money for there bloated budgets. they will stick their hands inside a bag of peanuts and throw it at homeowners affected by the settlement and say here HAVE SOME PEANUTS, because we dont give 1 shit about you. and that i the god awful truth behind the bullshit settlement. vote Romney 2012.

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Real Estate Technology

(TECH NEWS) It turns out that Internet of Things, like smart bulbs in homes, are not secure and give up your info - here...

Real Estate Marketing

(MARKETING) Your fancy, self-animating website might be making people violently ill, even if it is insanely beautiful. Sorry...

Real Estate Marketing

(MARKETING) Conduit is a CRM that does more than CRM, it analyzes your networking data to help you see how to improve your relationships.

Real Estate Corporate

(REAL ESTATE) Zillow has long been a data powerhouse, but a lawsuit about a $150M listing offers a look into listings claims.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.