National advocacy organizations that sought the return of $331 million to a fund for struggling homeowners attended a victory rally in Sacramento on Wednesday, August 14.
The National Asian American Coalition and the National Diversity Coalition, which led the lawsuit against then-California Governor Jerry Brown and legislative Democrats who diverted the funds for debt repayment, recently won suits to have the money returned to its original intent.
Several members of the Republican State Caucus from the Assembly and the Senate attended the press conference and gave brief remarks, including Assembly Republican Leader Marie Waldron, Assemblymember Tom Lackey, Assemblymember Jim Patterson, AssemblymemberJay Obernolte, and Assemblymember Devon Mathis; and Senate Republican Leader Shannon Grove, Senator John Moorlach, Senator Patricia Bates and Senator Ling Ling Chang.
The California Supreme Court upheld two lower court rulings which directed the State of California to return the funds to their original intent. In July, legislative Republicans delivered a letter to the current governor requesting him to outline a plan to repay the funds.
Current state Governor Gavin Newsom earlier this month announced that he would return the funds to the rightful fund.
As previously reported by the Asian Journal, the State of California received $410 million in a 2012 settlement with the five largest mortgage services in the country: Ally, Bank of America, Citigroup, J.P. Morgan Chase and Wells Fargo. After the national mortgage crisis, these companies were charged with multiple federal violations and agreed to pay more than $20 billion to affected homeowners.
The companies also made a separate payment of $2.5 billion to states to be used for a mortgage fund as a resource for homeowners and renters, with California receiving $410 million. However, $331 million of what the state received was illegally diverted to pay off state debts.
Led by executive director NAAC/NDC president and CEO Faith Bautista, Robert Gnaizda, NDC General Counsel Steven Sugarman, pastors from different churches, and members of the NAAC/NDC, the organizers called on Newsom to consult with HUD-approved agencies and homeowners regarding the disbursement and distribution of the funds, and to follow through on his promise to assist distressed homeowners in the state.
Officials from the NAAC and NDC were also scheduled to hold meetings with state officials as well as Democrats and Republicans from both the Assembly and the Senate to present their proposals to strategically and effectively use the funds to help distressed homeowners in California.
Bautista said, “I am deeply grateful for the leadership of the Senate Republican Caucus and their advocacy for the past several years. Senate Republicans continue to press both former Governor Brown and Governor Newsom to do the right thing and repay the funds. This is a victory for all Californians.”
“The $331 million was only intended to help homeowners abused by lenders during the mortgage and foreclosure crisis, not to pay down the state debt. Senate Republicans are committed to ensuring the original terms of the mortgage settlement are met and the State of California is in compliance with the court ruling,” said Senate Republican Leader Shannon Grove.