Missouri Attorney General Chris Koster stands in front of a chart in Jefferson City, Mo., showing the proposed distribution of the state’s $196,842,222.21 share of a settlement with the nation’s top mortgage lenders. Gov. Jay Nixon plans to use some of the money to help shore up the budget. He’s not the only politician eyeing the cash for purposes that have nothing to do with foreclosures.DAVID A. LIEB, Associated Press
JEFFERSON CITY, Mo. – The ink wasn’t even dry on a settlement with the nation’s top mortgage lenders when Missouri Gov. Jay Nixon laid claim to a chunk of the money to avert a huge budget cut for public colleges and universities.
He’s not the only politician eyeing the cash for purposes that have nothing to do with foreclosure. Like a pot of gold in a barren field, the $25 billion deal offers a tempting and timely source of funding for state governments with multimillion-dollar budget gaps.
Although most of the money goes directly to homeowners affected by the mortgage crisis, the settlement announced this month by attorneys general in 49 states includes nearly $2.7 billion for state governments to spend as they wish.
Some are pledging to use it as relief for struggling homeowners or to help related initiatives such as a Michigan plan to assist children left homeless by foreclosures. But several states are already planning to divert at least some of the money to prop up their budgets, and more will be wrestling with those decisions in the coming weeks.