Governor Brown and Legislative Allies Attempting to Illegally Raid $331 Million from the National Mortgage Special Deposit Fund

August 16, 2018 (Sacramento, CA). Struggling California homeowners are in danger of losing $331 million through illegal legislation proposed this week by allies of California Governor Jerry Brown and passed by the State Senate and Assembly Budget Committees.

This is Governor Brown’s second attempt to illegally raid this fund for struggling homeowners.  In 2014, the National Asian American Coalition (“NAAC”) and two other nonprofit organizations sued California’s Governor and state finance officials to compel the state to return $331 million they stole from the National Mortgage Special Deposit Fund (“NMSDF”) – a special fund created to help financially distressed homeowners avoid foreclosure and to help solve the housing crisis in California — in the case entitled National Asian American Coalition, et. al. v. Brown et. al.

The trial court found that the Governor’s actions were illegal and that California was obligated to restore the funds. Governor Brown appealed the decision, but the California Third District Court of Appeal last month affirmed the illegality of the fund transfers and ordered “the immediate return of these funds” to the NMSDF.

Having lost in court, Governor Brown and his allies are desperately seeking to circumvent the court rulings through budget trailer bills SB 861 and AB 1829.  These bills were filed and passed through the budget committee in a cloud of darkness with no real public transparency and are expected to be put to a vote in Senate and Assembly floor sessions in the next two weeks before the Legislature goes into final recess.

Budget trailer bills or “trailers” are legislation that implement specific changes to the law in order to enact the state budget. Over the years, trailers have been criticized because they skip the policy committees that regular bills must clear, cannot be overturned by voters via referendum, and take effect immediately upon being signed by the governor.

“Legislative Democrats in Sacramento have turned their back on vulnerable California homeowners who were victims of predatory lending during the mortgage meltdown. These are the very same people who claim to champion the interests of low-income families and people of color and stood side-by-side with activists during the Occupy Wall Street movement,” said Jin Sung, Chairman of the National Diversity Coalition.

Faith Bautista, President and Chief Executive Officer of the NAAC, expressed sadness on behalf of low income and minority homeowners who will be harmed by this political gamesmanship. “It’s disappointing that Governor Brown’s allies in the Legislature are now trying to deprive struggling homeowners of money that is rightfully theirs and that they have fought long and hard to recover through the courts.” Bautista continued, “If passed, these trailers will only plunge homeowners deeper into distress and California even deeper into an already severe housing crisis.”

Bautista appealed to state legislators to shun partisan politics and do the right thing by ensuring the NMSDF is fully funded with the $331 million as required by the courts, and rejecting the politics of budget trailer bills seeking to steal money from the poor and minority communities who will be helped by the NMSDF.  “This is not about politics, but about doing what is right. I hope the legislators do, not what Governor Brown pressures them to do, but what they know in their hearts is right for the people, and what the Court already has ordered after lengthy litigation. $331 million is badly needed by Californians to get the housing services they need to buy their homes or modify their mortgages to keep their homes.”

About the National Asian American Coalition
The National Asian American Coalition is a 501(c)(3) non-profit organization, a HUD-approved home counseling agency, and a United States Department of Treasury-approved Community Development Financial Institution. Our primary mission is to empower the twenty million Asian Americans and two million Asian American small businesses to become a national economic powerhouse. The NAAC is the nation’s leading Asian American nonprofit advocating against foreclosures, advocating for greater economic and small business development, and advancing the growing economic and social power of Asian Americans.
For more information:

About the National Diversity Coalition
The National Diversity Coalition is a 501(c)(3) tax-exempt organization that is comprised of community organizers, faith-based leaders, nonprofit directors, and business owners working collectively for greater financial equality and empowerment for underserved groups. Together we work with corporate and government leaders to advocate for greater opportunities in homeownership, small business, and financial literacy for all people.
For more information:


Faith Bautista
National Asian American Coalition
Mobile: (650) 892-8469

Jin Sung
National Diversity Coalition

Office: (650) 952-0522
Fax: (650) 952-0530


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