Back in March, I wrote a post about the mortgage settlement and what various states are doing with the settlement money. In many cases, the states essentially took the mortgage settlement money and were using it for other budgetary shortfalls instead of helping the homeowners who were injured by the mortgage servicing abuses.
Here in Arizona, the state government was prepared to sweep about half of the money it received for other uses. It made my blood boil when the Arizona government planned to sweep the money that should be spent helping Arizona homeowners.
I was happy to learn that the Arizona Center for Law in the Public Interest filed a lawsuit to stop the sweep of the mortgage settlement funds here in Arizona. In May, the Center filed in Maricopa County and obtained a temporary restraining order.
The sweep was placed on hold. According to the Arizona Capitol Times, “Arizona Attorney General Tom Horne has said the transfer is poor public policy but that he’ll defend the decision made by the state’s policymakers.”
That probably explains why he agreed to wait until December 31. This also gave the judge time to review the briefs on the matter.
The disagreement is whether the money can be used to fill in the state’s budgetary gaps, or whether it must be used for foreclosure-related relief. Oral argument was set for August 22, 2012. I’m sure there will be a decision forthcoming shortly, and I’ll report on that as soon as I see the decision.
Here are the pleadings:
What’s hiding in your loan and foreclosure documents? Find out here!