The governor and Legislature took $331 million from the National Mortgage Special Deposit Fund intended to help struggling homeowners and instead used the money to backfill their budget deficits. Thankfully, the California Supreme Court recognized these dishonest actions and found the money was unlawfully diverted.
This is the same decision lower courts came to, but instead of returning the funds, former Gov. Jerry Brown and current Gov. Gavin Newsom both decided to appeal until the case reached the state’s highest court.
The foreclosure crisis was devastating for many families and it was dishonest for elected officials to divert the funds allocated to help homeowners. While reducing state debt is a supportable goal, it should not be at the expense of struggling homeowners.
Since the mortgage settlement in 2012, California has had billions of dollars in annual budget surpluses that the state could have used to balance the budget. During this time, Sacramento politicians raised taxes and approved several state bonds, yet Democrat elected officials still believe it was appropriate to divert the mortgage funds.
Unfortunately, Californians should not be surprised by this. We have watched governors and the State Legislature repeatedly make promises to residents of our state, then turn around, and break them. Taking the resources designated to help those damaged by the “predatory practices” that caused the mortgage failure and using them to bail out poorly-prioritized spending by government agencies is just another example of their broken promises.
Now that the Supreme Court has spoken, it is time for the governor and the Legislature to stop with the appeals and return these funds. Return the funds and stop this game.
It is time for Governor Newsom and Sacramento Democrats to put homeowners first and provide the assistance and relief they promised.