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Sunday, February 12, 2012

About That 26 Million....

The Foreclosure Settlement reached last week by 5 major banks and 49 States looks to be a decent deal for a lot of people affected by some pretty shoddy work by the banks, and a good deal for the banks since it limits liability they'd face from individual states.

There is of course, some political points to be scored from it also. In Wisconsin Democrats immediately jumped on Gov. Scott Walker for the fact that $26 million of the State's cut of the pie is going to go to cover a budget shortfall.

Newpapers jumped on it as a flip-flop, after he'd criticized a previous governor for wasting the tobacco settlement funds by putting them into the general budget to shore up a (much bigger) deficit.

Being of a generally rational mind, I though that was probably a bad idea, but also understanding partisanship, I decided to look up the terms of the settlement, and see how he could get away with such a dastardly deed.

As it turns out, it only took 1 search with Google to find out he was actually putting the money where the settlement said it should go. ZeroHedge has a nice little breakdown of how the settlement money is divided.

Specifically, from Zero Hedge:

$3.5bn will go to state and federal governments to repay public funds lost as a result of servicer misconduct and to fund housing counselors, legal aid and other similar public programs.

Wisconsin's share of that 3.5 billion is 31.5 million. Of that $5.5 million is going into various programs across the state, the other $26 million is going to the general fund, to "repay public funds". What a concept, actually using the money where the settlement said it should go.

I understand Wisconsin Democrat's problem with this; they spent years raiding transportation, retirement and patient settlement funds to play 3 card monte with the budget and make it look good. The idea of actually putting money where it is designated to go is somewhat of a foriegn concept to them.

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