However, the implementation of the settlement has been much more complicated. As the Campaign for a Fair Settlement noted in a statement today:
The National Mortgage Settlement was supposed to help people stay in their homes. But one year later we have yet to see a full accounting of how the money has been spent, states are diverting large portions of the funds to meet their deficits instead of helping homeowners, and the hardest hit — particularly communities of color — are not seeing relief. Short sales and dual tracking continue, and the banks themselves are spending more to move people out of their homes than to keep people in them. The bottom line: a settlement that promised justice and relief for homeowners has instead continued business as usual for mortgage servicers and financial institutions.
As Propublica detailed in this map and Enterprise Community Partners laid out in this report, states all across the country have siphoned off funds meant to aid homeowners and used them for a host of other non-housing related programs. Many states simply plunked the money into their general funds to plug budget gaps.
Several states, meanwhile, have attempted to end the more pernicious acts of mortgage servicers on their own. California approved a Homeowners’ Bill of Rights, for instance, while Minnesota Democrats are attempting to adopt many protections not offered at the federal level.