Where will the mortgage settlement fund go?
Where will the mortgage settlement fund go? Gov. Jay Nixon will cut a considerable amount of budget for public colleges and universities. His announcement was made in times when the nation’s top mortgage companies have not yet been settled.
He is just one of the politicians who would divert funds to other purposes but foreclosure. With multimillion-dollar budget gaps, $25 million deal is sure to be tempting to state governments.
Affected homeowners of the mortgage crisis would still get some share, but as announced by attorneys general in 49 states, approximately $2.7 billion has been allotted for state governments, adding that they may use it as they wish. We can only wonder how this will affect Gainesville Florida homeowers
Some have promised to use it to help struggling homeowners or create new initiatives to provide assistance to children left homeless by the cruel foreclosures. Still, there are states that plan to tap some of the dollars to support their budgets. When this happens, many opposed to this decision will surely raise their voices.
This issue brings to mind what had happened to the 1988 tobacco settlement wherein the states spent billions in different projects, not one related to restricting smoking.
The money intended to help consumers alleviate their mortgage troubles should be properly and justly earmarked and not be put on any other purpose.
Putting a one time payout on immediate expenses will only exhaust the money, leaving the next year ahead at risk. There are several states that practice this but reasons that the most immediate problems should be dealt with high priority.
All these dilemmas came in when the attorney generals bestowed authority on state governments to spend the big amount of money however they feel necessary. But there have been a lot of suggestions coming in as to where the money should be spent.
With multimillion dollar budget deficit, the great $25 billion deal is pretty much alluring the state governments who pretty much needed the fund. We will see in the coming weeks and months if this cash will more like benefit the homeless or their budget.
Remembering again what had happened in the 1998 tobacco settlement wherein the money was spent on unfruitful sectors and not one went to campaign to quit smoking, the diversion of money is extremely discouraged.
The verdict in settlement decision will come from the federal judge in Washington sometime in February just when the lawmakers will be planning the budget for the next fiscal year.
The Republican legislative leaders commended the Democratic governors’ decision to use the money to reduce the budget deficit. Nevertheless, Nixon’s approach has relieved students from possible tuition fee hike.
Marie Cocco of Tobacco-Free kids stressed the failure 1988 Tobacco settlement, and emphasizes that it should be a lesson to learn from.
As the money is insufficient to meet the demands of economy, some consumer advocates pledged to be watchful in the disbursement of money.
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