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Promise to Distressed Homeowners Must Be Kept

As a state senator, I have seen many political shenanigans initiated by the Democrats who dominate the State Capitol. But what I recently witnessed ranks as one of the saddest actions that I have seen them take – legitimizing the seizure of money meant for homeowners hurt in mortgage crisis and spent on other things.

The Legislature passed and the Governor just signed, Assembly Bill 1829, which legalizes the taking of more than $330 million that was meant to help homeowners impacted during the Great Recession. The $330 million comes from the National Mortgage Special Deposit Fund that was established under the direction of then Attorney General Kamala Harris. It was the result of a $25 billion settlement between five major banks and nearly every state in the country.

The fund was supposed to help struggling homeowners, to help them keep a roof over their heads. Community activists – including those from Occupy Wall Street – demanded that the fund be created to help people in need. The activists cheered when the fund was created, thinking it would go to the intended recipients.

Instead, the Governor and the Legislature used accounting sleight-of-hand. Most of the funds were used to pay off state debt and help fund the operations of the California Department of Justice and the Department of Fair Employment and Housing. This let legislative Democrats claim that they were abiding by the settlement when the main result actually was using the money for something else. Angered by what had transpired, a coalition of community groups sued Governor Brown to return the money to the mortgage fund. In June 2015, a state judge ruled that the funds were “unlawfully transferred and must be returned.”

Not wanting to let go of the money his administration took, Governor Brown appealed the ruling, and a state appeals court upheld the lower court’s ruling this past July. The appeals court ruled that the money be returned to help the homeowners it was intended to help.

Instead of doing the right thing, the Legislature’s Democrats drafted Assembly Bill 1829 to make the court’s ruling moot. They made an illegal act (as determined by the courts) legal by simply passing a law saying that what they did previously was legal.

Think about the logic of what they did – in their minds, the law is whatever they say it is because they make the law. If they break a law, they just pass another one forgiving themselves for breaking it. Such actions are characteristic of a banana republic, not a representative democracy such as ours.

This is what happens when one party controls every statewide office, has a supermajority in the Assembly, and is one vote away from a supermajority in the Senate. One party can get away with these types of maneuvers unless we shine a light and hold it accountable.

The state should return the money to the mortgage fund so it can help Californians hurt during the mortgage crisis. But do not hold your breath. As long as we have one party rule in California, we will see such shenanigans again and again. And as long as I am in the Legislature, I will continue to do what I can to hold politicians accountable for their actions.

Jeff Stone represents California’s 28th Senate District. The district, which is entirely in Riverside County, stretches from the vineyards of the Temecula Valley to the Colorado River and includes the cities of Blythe, Canyon Lake, Cathedral City, Coachella, Desert Hot Springs, Indian Wells, Indio, Lake Elsinore, La Quinta, Murrieta, Temecula, Palm Desert, Palm Springs, Rancho Mirage and Wildomar.

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