The majority of the $2.5 billion mortgage settlement paid by the five biggest banks to 49 states and the District of Columbia, a settlement reached in April and intended to go toward consumer-focused programs, has been diverted into the states' general funds.
The majority of the $2.5 billion mortgage settlement paid by the five biggest banks to 49 states and the District of Columbia, a settlement reached in April and intended to go toward consumer-focused programs, has been diverted into the states' general funds, according to a survey by the investigative journalism website ProPublica. More than $966 million of the pot now resides in general funds; $545 million was distributed as direct aid to homeowners; just under $35 billion has been devoted to investigations while the states are still sitting on nearly $1 billion and haven't yet decided what to do with the windfall.
Louisiana's share of the settlement was $21.7 million. None of that money has been earmarked, according to ProPublica, which contacted attorneys general offices in the states to find out where the money is going. According to the site, "An AG spokeswoman said the office was working with the legislature to fashion a plan. An AG proposal earmarks a portion for consumer protection."
Louisiana's mortgage delinquency rate, according to ProPublica, stood at 6.85 percent in early June, just slightly higher than the national average of 6.65 percent.
See a chart of state allocations of the mortgage settlement here.