The National Asian American Coalition (“NAAC”), won a decisive victory for homeowners yesterday as the California Supreme Court denied review of a lower court ruling ordering the return of $331 million to the National Mortgage Special Deposit Fund (“NMSDF”) – a special fund created to pay for housing counseling, legal assistance, and fraud prevention services for financially distressed homeowners.
The state obtained this money as part of a 2012 national settlement with the nation’s five biggest banks for their fraudulent lending practices, which led to millions of people losing their homes due to mortgage delinquencies and foreclosures. At the height of the crisis, NAAC as a HUD-approved housing counseling agency was at the forefront assisting struggling homeowners negotiate loan modifications and provide refinancing to help them keep their homes.
Instead of devoting the money to helping homeowners affected by the crisis, however, then-Governor Jerry Brown illegally diverted the funds to plug budgetary shortfalls and to pay off existing state debt. NAAC with co-plaintiffs COR Community Development Corporation and National Hispanic Christian Leadership Conference then sued the Governor and state finance officials in 2014 to compel the return of the $331 million to the NMSDF.
Both the trial court and appellate court found the transfers to be illegal and ordered the immediate return of the funds to the NMSDF. Undeterred, Brown rushed a budget trailer bill through the state legislature before stepping down in an attempt to circumvent the courts, and then appealed anew to the Supreme Court. The Supreme Court remanded the case to the Court of Appeal, which found that the budget trailer bill could not work to retroactively cure the unlawful diversions. After years of litigation, the Supreme Court yesterday declined another review, making the lower court rulings final.
Faith Bautista, NAAC President and Chief Executive Officer, celebrated the arduous victory. “We fought long and hard for the homeowners and I’m so happy that they will finally get the help they need.” Bautista, however, said the fight is not yet over. “We won’t rest until the money is in the hands of those who really need it,” Bautista said. “If there’s one thing we learned throughout this difficult process, it’s that community groups must have the strongest say in allocating this money. We can’t trust that politicians will do what’s best for homeowners after they’ve tried at every turn to frustrate the will of the people and the courts.”
Bautista along with the community, faith-based and nonprofit leaders of the National Diversity Coalition (“NDC”) plan to hold a rally and press conference at the state capitol to ensure that the NMSDF gets immediately funded, and to make certain that community groups on the ground that regularly interact with struggling homeowners and distressed families will administer or at least provide strong oversight over the use of the funds.
About the National Asian American Coalition
The National Asian American Coalition is a HUD-approved 501(c)(3) nonprofit housing counseling organization and a US Department of the Treasury-certified Community Development Financial Institution (“CDFI”). Since its inception in 2004, the NAAC has advocated for and has provided essential services such as housing counseling, microlending, and alternative financing to Asian Americans and other minority and low-income communities.
For more information: https://naac.org/
About the National Diversity Coalition
The National Diversity Coalition is a 501(c)(3) nonprofit organization that includes many of our nation’s major African American, Asian, and Latino organizations as well as leadership from major minority and women oriented national non-profits, businesses, and CDFIs – united by a common mission of advocating for greater opportunity, economic empowerment, and financial equality for a constituency of over 3,000,000 low-income, minority, and other disadvantaged communities.
For more information: https://nationaldiversitycoalition.org/
Contact
Faith Bautista
President & CEO, National Asian American Coalition
Chief Executive Officer, National Diversity Coalition
E-mail: fbautista@naac.org
Mobile: (650) 892-8469
Office: (650) 952-0522
Fax: (650) 952-0530
