Failing to help Virginia families out of the housing crisis

May 24, 2012

The Daily Press reports, "Virginia lawmakers in March diverted most of a multimillion-dollar mortgage settlement payment to local governments... Direct payments to states were intended to protect consumers and assist state foreclosure prevention efforts, but in many cases state legislatures funneled some or all of their payments to other budget need."

Progressive Point: Thousands of Virginia families were the victims of the big banks' greed and unscrupulous foreclosure practices. A landmark settlement was intended to help make these families whole but Richmond conservatives diverted 90% of the money to other projects.

Aiding struggling Virginia homeowners doesn't just help a few--alleviating the housing crisis would help raise home values and inject cash into our economy. Many Virginia families still need help getting out of the housing crisis, and diverting the money to pet political priorities was not that help we deserved.

Get the Facts:

• According to the Department of Justice, direct state payments in the settlement were intended to "fund housing counselors, legal aid and other similar public programs determined by the state attorneys general." (Department of Justice February 9, 2012)


• Virginia received $66.5 million from the national foreclosure fraud settlement with five large banks. Instead of using it as intended, the General Assembly diverted $59 million of it (89%) to local governments and only left $7.5 million for helping Virginia homeowners. (Daily Press, May 23, 2012)


• Attorney General Ken Cuccinelli told General Assembly committees it was his "preference that money be used for foreclosure prevention or counseling programs, or to enhance consumer protection efforts to prevent and prosecute financial fraud." (Daily Press, May 23, 2012)


• House Democrats attempted to force spending 100% of the money on foreclosure victims but were defeated on a vote.  (Daily Press, May 23, 2012)

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