Let’s say I give you $10 and ask you to pick me up a sandwich and salad for lunch. But when you return, you’re holding a bouquet of flowers that you plan to give to your girlfriend.
“Hey, that money was for my lunch,” I say.
“I did get you some food,” you say as you toss a candy bar at me. “But I decided that the money could be better used for something else.”
That my friends, is what the States of Missouri and Wisconsin are doing with their shares of the national mortgage settlement.
The $26 billion dollar settlement is from five of the largest home lenders as a result of allegations of improper foreclosures based on robosigning and faulty paperwork. Simply put, it’s a payout. The money is supposed to provide principal reduction or refinancing, as well as payments to borrowers who lost their homes.
So the group the caused a problem is being asked to pay those who were affected by the mess.
But lawmakers in Missouri and Wisconsin have decided that they should use some of the millions of dollar for other things. In Missouri, $40 million would go to fund higher education at colleges and universities, places that had faced 40% funding cuts. Wisconsin is just putting $25 million of its settlement money into the state general fund, helping decrease a budget shortfall.
Money that is supposed to help homeowners is now being used to reward governments that can’t budget properly. Instead of a long term fiscal policy, they are treating the settlement money like a golden egg that comes from a goose. They’re not fixing their problems, they are only shoving them under a rug.
Meanwhile, many who were affected by the mortgage crisis (and yes, I know many of them were idiots for agreeing to deals that made no sense), are not getting the full settlement.
Wouldn’t it make more sense to put the fate of the millions of dollars up for a public referendum? While these elections are costly, we may need them at a time when we can’t trust our elected officials to follow instructions.