Pam Bondi: Mortgage Settlement Money Isn't for State Employee Pay Raises

By: Jim Turner | Posted: October 24, 2012 3:55 AM

Pam Bondi

Attorney General Pam Bondi

Attorney General Pam Bondi is adamant that a $334 million mortgage settlement sitting in escrow since February will go to distressed Florida homeowners, not to state employees for pay raises.

As part of the mortgage settlement finalized in April, 2012, the nation's five biggest banks agreed to pay $25 billion to 49 states and the District of Columbia. In addition, $2.5 billion was divvied up among all the attorneys general according to how large the states were and how hard they were hit by the crisis.

Florida has the highest percentage of inventoried foreclosure homes in the country -- 11 percent.

While Bondi continues to talk with legislators over the fate of the money, she believes an agreement -- which she claims doesn't need legislative approval -- will soon be hammered out.

“This money is to help consumers in the foreclosure crisis,” Bondi said on Tuesday.  

“This money, that I signed the settlement agreement for, will not be used for pay raises if I have anything thing do to with it, which I do.”

Until Tuesday, Florida was one of just a few states where the attorney general had not announced plans for a significant portion of the money. ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest, contacted every state to find out what they were doing with the money.

What Pro Publica's reporters discovered was that of the $2.5 billion, just over a billion dollars has been pledged for housing-related programs, while a roughly equal amount has been diverted to plug budget holes or fund programs unrelated to the foreclosure crisis.

Of the some $378 million still to be determined, almost all of that is Florida’s.

State Rep. Michelle Rehwinkle Vasilinda, D-Tallahassee, had proposed Monday that some of the money go to state employee pay raises.

“We have the lowest paid work force among the states. We have the leanest state work force among the 50 states, and that comes in a state that’s extremely complex," Vasilinda told WFSU.

Katie Betta, spokeswoman for Senate President-designate Don Gaetz, R-Niceville, maintains the settlement money, currently sitting in an escrow account, must be appropriated by the Legislature.

“As you know, there are certain guidelines for how the $300 million currently in escrow can be spent; however, other funds comprising the vast bulk of the settlement Florida received will go directly to homeowners facing foreclosure via debt write-offs, refinancing and other negotiations between homeowners and lenders,” Betta responded in an email on Tuesday.  

“It is our understanding that there are also other programs with unspent federal funds, including the Florida Housing Finance Corps, which can provide relief for additional Floridians facing foreclosure.”

It was the state attorneys general, not state legislatures, that negotiated the settlement with the country’s five largest loan servicers: Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo.

According to the settlement, state and federal investigations found that the five loan servicers routinely signed foreclosure-related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.

Part of the settlement went to Florida borrowers who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011.

The settlement agreement, announced in February, lists permissible uses of the settlement funds, including housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, and training and staffing of financial fraud or consumer protection enforcement efforts.

Nancy Smith contributed to this story.
Reach Jim Turner at or at (772) 215-9889.

Comments (6)

Bernard Sinner
8:00PM JAN 7TH 2015
I have contacted Bank of America and the company they sold my loan to; which is Seterus. Neither company has offered restitution for a phony appraisal or the 6.25% interest rate. I sent you an email last week, but I haven't received a reply. Please let me know what other home owners are receiving from the settlement. Thank you. Bernard Sinner.
Not so fast
1:28PM OCT 24TH 2012
Attorney General Bondi should know enough about the law to know to put vital terms and conditions into the settlement contract, which she obviously failed to do. Conditioning the settlement agreement on the return of 90% of the settlement money (10% for administrative costs) to homeowners who have lost their homes to foreclosure would have protected the consumers (on whose behalf the lawsuit was filed) instead of the legislature. The AGs office could have easily set up a distribution plan and ensured the use of the money for its intended purpose. Without that language in the settlement contract, she has to contend with the desperate legislature who want to put the money into general revenue, which amounts to a double taxation on all the homeowners who lost their money...revictimization of the victims should not be the goal for Florida.
7:42AM OCT 24TH 2012
State Rep. Michelle Rehwinkle Vasilinda should not be in office. If we have the lowest paid state workers, it is an indication that we are doing better than all the other states. We have a duty to the taxpayers to use their money wisely and make buying decisions with the taxpayers in mind. The only indication that we need to raise the wages is when too many quit to go to work in private industry. (Too many would be about half the current number.) Democrats seem to think government exists to serve government, that is why the smarter, wiser, Floridians are Republicans and have kept the cost of government down.

We need to purge the Democrats from the legislature because they don't fully understand that they work for ALL the people not just the government employees.
10:55AM OCT 26TH 2012
that sounds like a campaign commercial based on option not fact. you do you think carry's out the policies passed by the legislature. florida has for yrs had one of the the lowest number of state employees among all states. they are also among the lowest paid. they haven't had a raise in 6 yrs and in fact we taxed 3% to balance the budget for you. illegally according to the courts. your comments show a basic lack of knowledge of state government.
9:17AM OCT 24TH 2012
Would it be so horrible to reward hardworking state workers that have gone 6 years without a raise a little for their efforts? I've been working for the state for 6 years and have not seen 1 cent in a raise. The cost of gas, food, and rent has gone up, but our wages have stayed the same.

I have a family to provide for, bills to pay, food to put on the table, but as the cost of living increases, we have become a paycheck to pay check family.

I have burned through most of my savings to keep our family afloat since my wife was laid off, we have cut all our expenses to the bare minimum to survive. A small raise would have helped our family volumes, but instead I am told that all my hard work and unpaid overtime will go unrewarded for God knows how long.
7:30AM OCT 24TH 2012
I think I am falling in love with Pam Bondi. She has been the epitome of what an Attorney General should be. When Rick Scott is termed out, she should be his successor.

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