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Judge orders Calif. to use bank settlement funds to help homeowners

Posted by Mehran Aram on Mon, Apr 8, 2019 @ 07:04 AM

In 2012 California was granted $331 million in a settlement reached between the state and the nation’s largest banks that had been accused of abusing lending practices leading up to the Great Recession. The state has held on to that money, using some of it to pay off debt and housing bonds. Last week a judge ordered that California’s Finance Department use that money for its intended purpose: to help homeowners victimized by foreclosures during the recession.

Gov. Jerry Brown had managed the redirecting of the funds after approval by the legislature, but a court of appeals ruled that the funds were unlawfully misappropriated.

The money will be used to fund hotlines to help foreclosed homeowners, legal aid, consumer education and efforts to combat financial fraud.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

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Topics: foreclosures, Homeowner, Lending Practices, California Finance Department