Several states across the country, from Vermont to Wisconsin to California, have been taking some of the money they received from the foreclosure fraud settlement signed with the nation’s biggest banks and diverting it away from its intended purpose of providing relief to desperate homeowners. According to ProPublica, the total amount of money taken from the hands of needy homeowners is close to $1 billion.

Now, housing advocates are alleging that New Jersey Gov. Chris Christie (R) is doing the same thing, diverting $75 million meant to help homeowners into the Garden State’s general fund:

Affordable housing advocacy groups today said Gov. Chris Christie is misusing $75 million from a foreclosure settlement, calling his budget plan “reckless” and “a shell game.”

Christie is putting that money into the budget general fund, advocates said at a Statehouse press conference this morning, instead of specifically earmarking it to fund help for people who have been foreclosed on.

Several governors, the first of whom was Wisconsin Gov. Scott Walker (R), have used the settlement money to simply bolster their general funds, patching over budget problems that they’ve created. Progressives in New Jersey have been concerned that Christie would follow suit, and those concerns now seem to be justified. Previously, New Jersey’s attorney general had declined to confirm whether or not the state would use the settlement funding for foreclosure aid.

But not all homeowners are quietly accepting losing out on the funding. In Arizona, a group of homeowners have sued the state, saying that the diversion of settlement funds is illegal.

Last month, Bank of America foreclosed on a Los Angeles woman and her disabled daughter. Dima Rodriguez had spent thousands of dollars retrofitting her home to accommodate her daughter — who has cerebral palsy — and fell behind on her loan payments. Bank of America gave her a loan modification, and even though Rodriguez had made her trial modification payments for a year, the bank sold her house at auction, right out from under her.

However, Rodriguez and her daughter will get to stay in their home, thanks to some help from Occupy Wall Street protestors:

Desperate, Rodriguez contacted several community groups including Occupy Fights Foreclosures — the battle to save the Rodriguez home began. Suzanne O’Keeffe, with Occupy Fights Forclosures, says the bank didn’t treat the Rodriguez family right. She charged they not only didn’t fill out the proper paperwork to foreclose, they waited too long. [...]

Now, [Rodriguez] is determined not to look back. “It’s time to look forward,” Rodriguez said. “Thank God the bank listened.”

As ThinkProgress reported back in December, Bank of America is taking the Occupy movement’s foreclosure prevention actions seriously, warning employees to be prepared should Occupy make an appearance. Occupy protesters have successfully prevented foreclosures across the country, from Rochester to Minneapolis to Los Angeles.

Thursday, Arizona Gov. Jan Brewer (R) announced that her state would become the latest to devote its portion of funds from the $25 billion mortgage fraud settlement to balancing the state budget. The funds were intended to go toward relief for struggling homeowners, but Brewer and the state legislature will use $50 million of its funds elsewhere.

Arizona Rep. Raul Grijalva (D) isn’t pleased with Brewer or the legislature and said as much Friday, saying Brewer took away “the once chance” homeowners had “to get some help,” The Nation reports:

“Working families were given the short end of the stick, and now Gov. Brewer and the Legislature won’t even let them have that,” Grijalva said. “This decision takes away the one chance Arizonans had to get some help navigating the banking bureaucracy that greased the skids on millions of foreclosures. It’s a clear statement of principles, that’s for sure.”

Arizona has been torched by the housing crisis — it lead the nation in foreclosures in March, and nearly half of its homeowners are underwater, the second most in the country. According to the Arizona Housing Alliance, the $50 million could help as many as 85,000 homeowners. Instead, it will go toward balancing a state budget that hands out more than a half-billion dollars in corporate tax cuts.

President Obama outlined three proposals to address America’s struggling housing market today in Nevada, the state with the nation’s second highest foreclosure rate. Ahead of the speech, presumptive Republican presidential nominee Mitt Romney circulated a release hitting Obama’s housing record, including a graphic criticizing the president for roughly the 3 million foreclosures and a high unemployment rate that have occurred since he took office in 2009:

Romney’s criticism is odd, considering the candidate’s only elucidated housing proposal was telling homeowners, “Don’t try and stop the foreclosure process. Let it run its course and hit bottom.” That Romney said it in Nevada, a state that has been among the tops for foreclosures since the crisis, made his policy prescription even more remarkable — and it earned him strong rebukes from Nevada’s Republican governor and several of the state’s Republican lawmakers. And even though Romney’s economic plan had 59 points — none was related to housing.

The foreclosure crisis Romney blames on Obama, meanwhile, started well before he took office, culminating in the 2008 financial crisis that started the Great Recession. High unemployment — which Romney again blames on Obama — was largely a result of that crisis, and though Romney has continually slammed Obama for making the economy worse, he and his campaign have yet to substantiate those claims.

Since the $25 billion foreclosure fraud settlement was forged between most of the nation’s attorneys general and the biggest banks, several states have taken a portion of the money they were allotted — which was intended to go towards housing relief — and used it for other items in their budgets.

Arizona recently became the latest state to pull such shenanigans, diverting $50 million of its share of the settlement to balance its state budget:

At issue is the decision of the Legislature and Gov. Jan Brewer to tap $50 million from the $97.7 million the state received as part of its settlement with five mortgage-lending firms. They said they needed the money from the national mortgage settlement to balance the state budget. Initially, the intent was to use the money for prison construction. [...]

The money comes from a settlement [Arizona Attorney General Tom] Horne’s office negotiated in February with five lenders, and it is intended to provide relief to people affected by the foreclosure crisis as well as to prevent poor lending practices.

“There’s a lot of pressure on the budget,” said Arizona House Speaker Andy Tobin to justify the move. But as Mark Ladov and Meghna Philip of the Brennan Center for Justice noted, that money could do a lot of good in a state that has been pounded by the housing crisis:

The final state budget sweeps $50 million from the foreclosure settlement into the state’s general fund. This is despite the fact that Arizona posted the highest foreclosure rate in the nation in March, with an astonishing one out of every 300 housing units receiving a foreclosure notice…The Arizona Housing Alliance estimates that $50 million could provide 75,000 troubled homeowners with housing counseling and 10,000 homeowners with legal assistance. That investment would more than pay for itself by strengthening communities, boosting property values and helping to restore the state’s economic health.

Instead, Arizona, like several other states, will simply siphon the money elsewhere, leaving homeowners to continue struggling on their own.

An Atlanta-area family facing foreclosure was evicted early Wednesday morning as sheriff’s deputies attempted to avoid activists affiliated with the Occupy Our Homes movement. Christine Frazer received a foreclosure notice on her home from One Corporation in October 2011 and has been fighting it in federal court ever since.

Protesters set up camp outside her home in January, but around 3 a.m. Wednesday morning, only one protester was present. At that point, between 25 and 30 sheriff’s deputies descended “from every direction” on the home, a group spokesperson said, and evicted the family. Atlanta’s WSB-TV reports:

Around 3 a.m., deputies turned out in large numbers at the home on Wellhaun Road. Later, members of Occupy Atlanta showed up to rally against the eviction. [...]

Her lawyer, Joshua Davis, said the eviction shouldn’t have happened because of the pending litigation.

“They treated my client like she was some type of drug dealer, some type of criminal, came in as if they were executing a warrant to find drugs. It makes no sense,” Davis said.

According to Occupy Our Homes, four generations of Frazer’s family — including her 83-year-old mother and four-year-old grandson — were evicted in the middle of the night. Sheriff’s deputies then took her dogs to the pound and blocked off the street, refusing to allow anyone to secure the family’s possessions that remained in the house. Frazier was able to stay with a friend but was “completely distressed” throughout the day Wednesday, according to a spokesperson for Occupy Our Homes. Protesters were able to gather and salvage her belongings.

Protesters went to the DeKalb County executive’s office yesterday and were told the sheriff’s department was carrying out a judge’s orders, the spokesperson said, but they received no further information. Occupiers are planning to meet with Frazier this afternoon to discuss how they plan to move forward.

Protesters gathered last week outside the California home of Wells Fargo Chief Financial Officer Tim Sloan, where one homeowner was arrested while trying to deliver her mortgage payment directly to Sloan.

Ana Casas Wilson, a California homeowner who has cerebral palsy that forces her to use a motorized wheel chair, waited on Sloan’s front porch so she could hand him a payment on her foreclosed home. Casas Wilson has lived in her home for 27 years, but fell behind on her payments during a hospital stay. Wells Fargo, she said, has been unwilling to negotiate a modification, even though she is again able to make regular payments. After police allowed her to remain on Sloan’s porch for 15 minutes, she was arrested when she refused to leave, the Los Angeles Times reports:

Just before 8 p.m., about 90 minutes into the demonstration, police formed a line around the home, declared the assembly illegal and ordered the group to move 75 feet up the street.

Casas Wilson refused to go and was taken to San Marino police headquarters with the assistance of San Marino Fire Department paramedics.

Casas Wilson isn’t alone. Banks have used shady foreclosure processes throughout the housing crisis, and Wells Fargo has been one of the worst offenders. It has used fraudulent practices like robo-signing, foreclosed on homes over clerical errors, and used a process known as dual-tracking — in which it advises customers on loan modifications while also pursuing foreclosure. Wells Fargo was part of a $25 billion mortgage fraud settlement with state attorneys generals and the federal government and has had to pay multi-million-dollar settlements when homeowners took the bank to court.

The practices have hit homeowners who are struggling for various reasons, whether because of unemployment, rising health care costs, or disability. In March, Bank of America foreclosed on a homeowner who took out a loan to make her house more accessible to her disabled daughter, even after the bank offered a modification. “I’m doing this because people need to see what the banks are doing. It’s awful. It has to stop,” Casas Wilson told the Pasadena Sun. “When I was down and out in the hospital they took my house.”

Hundreds of protesters, including religious leaders, union workers, and other 99 Percent Movement activists, gathered outside Wells Fargo’s shareholder meeting in San Francisco today, protesting the bank’s fraudulent foreclosure practices. Wells Fargo, the nation’s largest mortgage servicer, has a well-documented history of using fraudulent practices like robo-signing, and even more came to light last week when an insider account detailed the bank’s foreclosure unit as operating “exactly like an assembly line.”

 

Ahead of the protests, a Wells Fargo spokesperson told San Francisco’s ABC news affiliate that the bank has paid taxes and is a “responsible corporate citizen” that “makes an effort to keep people in their homes“:

Wells Fargo spokesman Ruben Pulido released a statement early this morning saying the bank is a “responsible corporate citizen” and paid $6 billion in taxes for 2011.

“Wells Fargo makes efforts to keep people in their homes,” Pulido said. “Over the past year, less than 2 percent of owner-occupied loans in our servicing portfolio have resulted in foreclosures.”

Wells Fargo was among 30 corporations that paid nothing in federal income taxes from 2008-2010 — its tax rate over that time period, in fact, was -1.4 percent. Adding 2011 to that time period just barely inches the bank’s rate into the positive.

The idea that Wells Fargo makes every attempt to keep homeowners in their homes, meanwhile, is laughable. The bank has been among the worst perpetrators of practices like robo-signing and dual tracking — the process of simultaneously offering homeowners loan modifications while also pushing them toward foreclosure. It has wrongly foreclosed on homes it didn’t own, and its victims may include thousands of members of the American military.

The initial protests drew roughly 500 people, according to early reports from a local NBC affiliate. Early marches through the city shut down numerous San Francisco streets and remained peaceful, according to NBC, though there have been arrests reported on Twitter. Later, there were more than a thousand protesters, according to other estimates, and clergy members and protesters who had purchased shares in Wells Fargo attempted to enter the meeting. Here are some pictures of the protest:

This isn’t the first time religious leaders or Occupiers have targeted Wells at its San Francisco headquarters. Local churches moved $10 million from the bank in February to protest its foreclosure practices, and they held Ash Wednesday services outside Wells Fargo asking it to repent for its wrongful practices.

That Wells Fargo has fraudulently processed mortgage documents using a process called robo-signing has been evident for nearly two years, since scandal enveloped the mortgage industry in 2010. That it kept doing it even after the scandal broke has been known for months. The practice, at Wells Fargo and other Wall Street banks, has led to waves of improper foreclosures and a $25 billion settlement with the federal government and state attorneys general.

A new report from MSNBC, however, provided an inside account of how Wells Fargo’s robo-signing department works. Unqualified employees with salaries ranging from $30,000 to $50,000 are given titles like “vice president of loan documentation” so they can sign foreclosure documents. Actual supervisors institute quotas on employees, forcing them to sign a certain number of foreclosure files each day — sometimes telling them they can’t eat breakfast or take lunch until they’re done. Documents required for homeowners to avoid foreclosure were ignored, left sitting on an unattended fax machine.

The result: the nation’s largest mortgage servicer often improperly foreclosed on homeowners who weren’t past due or owed little interest while pushing the files out the door as fast as possible, as an insider told MSNBC:

Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed. [...]

“There was one file where they weren’t even past due and they were in foreclosure status,” the loan processor said. “They’re pushing these files and pushing these files….”

The MSNBC report comes just a month after a similar report from the inspector general of the Department of Housing and Urban Development, which found many of the same occurrences at Wells Fargo. In that report, Wells Fargo allegedly put an employee who had previously sold pizza in charge of loan documentation. Worse yet, the report found that executives at the banks knew about the practices and refused to stop them.

Higher-ups at Wells Fargo, however, are still denying that these abuses take place. “No one here is asked to sign anything they don’t understand. Period. End of story,” Michael DeVito, executive vice president of Wells Fargo’s Home Mortgage Default Servicing, told MSNBC. “There’s no production quota and if a team member says, ‘I don’t understand this I’m not going to sign it,’ that’s fine.”

Another Wells Fargo employee had a different account. “It’s exactly like an assembly line,” a loan processor told MSNBC. “You sign it, you push it off to a notary, they stamp it, you put it in a box and it goes somewhere else.” The next step, unfortunately, is that someone loses their home.