Further delay seen in foreclosure settlement funding approval
Housing activists are worried that differences between the Attorney General's Office and the lame-duck Republican-dominated Legislative Fiscal Committee — which meets Thursday morning — could delay spending New Hampshire's share of $10 million of mortgage fraud settlement money on programs to help prevent people from losing their homes.
The Executive Council had earlier signed off on a plan to spend the money on providing legal assistance and counseling to homeowners and an anti-fraud unit at the AG's office.
But Rep. Ken Weyler, R-Kingston — chair of the fiscal committee — objected to the unit because it would commit the state to hire additional staff.
Weyler, who survived Tuesday's Democratic wave but won't be in charge of the committee when his party gives up power in January, said, "We are not adding other positions. The Democrats may take over and do it, but they want to be slaves of the [state employees] union.
"Instead, Weyler wants to amend the plan to use the money proposed for the fraud unit — about $2.5 million — and contract with a local law firm to do the same job. That would mean that portion of the money would have to go back to the Executive Council. But such an action wouldn't hold up spending the rest of the funding, he said.
But Elissa Margolin, director of Housing Action NH, is concerned about any additional delay in the appropriation.
"We have families facing foreclosure right now," Margolin said.
The 10-person fiscal committee — half of whom are state representative and half senators — was asked to approve the deal in October, but held off because too many senators were campaigning for re-election, Weyler said.
In the last few days, Margolin said, she heard that some members were considering tabling a decision on funding the program until January. As for breaking off a piece of the program and changing it, "This was vetted by an elected Executive Council that is 100 percent Republican," she said. "There is no clear reason that there should be further delay.
"James Boffetti, senior assistant attorney general at the Consumer Protection and Antitrust Bureau, said that additional staffing was urgently needed. The office has been deluged with 2,168 calls on its mortgage hotline, with some 875 formal complaints since January, and that is on top of some 7,186 non-mortgage calls and 2,372 other complaints.
Weyler said he has talked to people at the AG's office about the delay in making the decision, and they were not happy, "but it is what it is," and if the AG office pulls the request from the fiscal committee to get a more favorable response next year, then it would be the AG that should be blamed for the delay.
The money in question comes out of $25 billion settlement between 48 states and five major banks: Bank of America, Citi, Wells Fargo, JP Morgan Chase and Ally/GMAC.
Some of that money — handled on a national level — would go to compensate homeowners who lost their homes through foreclosures, though the amount is small, as little as $800 if everyone who is eligible applies, but more likely about $1,800.Most of the $43 million earmarked for New Hampshire can be used by banks to modify loans. Some $10.5 million of that money — the funds now in question — would be overseen primarily by the Attorney General. About $3.5 million would be administered by the New Hampshire Housing Finance Authority to counsel a thousand homeowners either facing foreclosure or those who have already lost their homes.
About another $3.5 million would be used to pay for legal representation for homeowners.
As for the fraud unit, $1 million would be used to build a database so the state's various financial agencies — the AG's consumer protection unit, the Banking and Insurance departments and the Bureau of Securities Regulation — could easily check on complaints made at other agencies.
Currently, the agencies often don't know what the others are investigating, a problem brought to light by the recent Financial Resources Mortgage Ponzi scandal. The remaining $2.5 million would be used for the fraud unit to hire an attorney, a forensic accountant and a paralegal.