Capitol Alert
The latest on California politics and government
March 14, 2014

Gov. Jerry Brown and Controller John Chiang unlawfully redirected $369 million in homeowner relief secured by Attorney General Kamala Harris, according to a lawsuit filed in Sacramento Superior Court on Friday morning.

A coalition of Latino and African-American faith groups and an Asian-American home counseling organization brought the suit, demanding that California send millions to homeowners trying to stave off foreclosure.

“To this day, countless California victims of the mortgage and foreclosure crisis and their supporters are waiting to receive any benefit, much less the full benefit, of the settlement the Attorney General obtained for the State of California as compensation for the harms the victims suffered and continue to suffer,” the lawsuit reads.

The plaintiffs are represented by Neil Barofsky, who achieved prominence as the Treasury Department’s inspector general policing the $700 billion Troubled Asset Relief Program, which bailed out the spiraling banking industry.

Harris in 2012 was instrumental in extracting a landmark $25 billion settlement from banks related to the predatory lending practices that helped fuel the housing market’s collapse in 2007. Struggling homeowners were supposed to get financial relief from the deal, but the lawsuit filed today demands that Brown repay millions diverted to plug budget gaps.

To read entire story, click here.