Gov. Jerry Brown and the Legislature illegally raided a state fund that was created to help distressed homeowners and took $331 million to balance the budget, a judge has ruled.
The money was taken from a fund that contained California’s share of a $5 billion nationwide settlement of a fraud suit by states and the federal government against the nation’s five largest mortgage lending companies: Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo and Ally Financial, formerly known as GMAC.
The settlement, which state Attorney General Kamala Harris negotiated in 2012 for California, was designated for foreclosure relief, aid to homeowners and other housing-related purposes. Starting in June 2012, however, Brown and the Legislature appropriated most of the fund to help pay down the state’s deficit over three fiscal years, through mid-2014.
Photo: Max Whittaker/Prime, Special To The Chronicle© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.