Earlier this year, Joseph Smith, who monitors the $25 billion mortgage settlement fund for 49 states, declined to comment on the Arizona legislative Republicans’ decision to sweep $50 million from Arizona’s portion of this settlement.
Given his position, I can understand why he did not want to comment, but I definitely want to comment. The $50 million came from a fund that was created by an agreement between 49 states, the federal government and the country’s five largest residential mortgage loan servicers, who allegedly engaged in fraudulent loan and foreclosure practices. The money was supposed to be used to help people affected by the foreclosure crisis.
The Republican Legislature’s decision to divert this money undermines the very basis for the settlement — to provide help for people struggling as a result of the foreclosure crisis. In this case, the Arizona attorney general’s participation in the settlement was meaningless.
If the state’s attorney does not have the power to enter into an agreement that the Legislature will honor, who does? If binding agreements mean nothing to the Republican-controlled Legislature, then the implications going forward are dire.
— Rep. Debbie McCune Davis, LD 30.