Gov. Gavin Newsom proposed to spend California’s share of a national mortgage settlement on legal assistance for struggling homeowners and renters, funds that lawmakers illegally diverted in 2014 to help erase the state’s budget deficit.
, leaving in place the appeals court order to repay the money.
Public Counsel lawyers were able to remove several liens from her home and help her regain her financial footing. Newsom pointed to Castro’s story and said the proposed fund could help protect renters and homeowners. He added that there hadn’t been enough regulatory oversight of lenders and that the state needs to do more.
While plaintiffs in the case applauded new help for homeowners, they were disappointed that Newsom did not ask for their input in crafting a way to spend the money they fought to have the state pay back. An outline provided by the Newsom administration says the new trust fund will pay not only for legal assistance, but renter and homeowner education efforts and programs to stop evictions and foreclosures. Those ideas mirror some of the language in the California provisions of the original consent decree agreed to by lenders and attorneys general in 49 states.
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