News From Terre Haute, Indiana

Indiana Legislature

March 23, 2012

Settlement money set aside to help pay utility bills

Funds come from portion of mortgage fraud settlement

TERRE HAUTE — After Indiana received a cut of the 1998 multi-billion settlement from the tobacco industry intended to pay for public health initiatives, the state legislature tapped into the money to pay for a host of non-health related expenditures.

Legislators likely won’t be able to do that with Indiana’s cut of this year’s multi-billion dollar settlement with mortgage lenders accused of fraud.

A $28.8 million slice of the mortgage fraud settlement fund will go into a specially designated pot of money to help low-income Hoosier homeowners pay off their utility bills.

That pot of money, expected to be doled out in $4 million increments over the next seven or eight years, can’t be used for anything else, under legislation signed into law last week by Indiana Gov. Mitch Daniels.

Supporters of the new law say low-income homeowners who were most at-risk of being foreclosed on by their mortgage lenders are also the most likely to have difficulty paying their utility bills.

“The mortgage lending institutions that preyed upon borrowers and engaged in illegal practices are paying millions of dollars in settlement money to Indiana,” said state Attorney General Greg Zoeller at a news conference Tuesday. “The Legislature wisely channeled this flow of dollars into a fund where at-risk homeowners can be helped.”

Zoeller was one of 49 state attorneys general who negotiated a $25 billion settlement with five major mortgage lending banks accused of engaging in illegal “robo-signing” of foreclosure documents. That settlement, announced in February, set aside about $100 million in direct assistance for Indiana homeowners who lost their homes through foreclosure or are at-risk for doing so.

Another $45 million was directed to the State of Indiana. About $15 million will go to the Attorney General’s office to expand efforts to prevent mortgage foreclosure. And the rest — about $28.8 million — will go to boost funding of the Low Income Home Energy Assistance Program, known as LIHEAP.

Rep. Ed Clere, a New Albany Republican who worked with Rep. Peggy Welch, a Bloomington Democrat, to help pass the bill said the decision to use some of the mortgage-fraud settlement funds to help struggling families pay their utility bills is a good one.

Clere said that while the economy is recovering from its worst days, the threat of mortgage foreclosure still exists for many. “There are still many Hoosier households struggling,” Clere said.

The legislation came about as a solution to a difficult problem: Indiana’s share of the federally funded LIHEAP program shrank from about $100 million to about $82 million last year. That meant the low-income families who were eligible for the assistance received a smaller portion of funds to help pay their utility bills. The average amount of assistance dropped from about $378 per household in 2011 to $225 in 2012.

Welch initially filed legislation that would exempt LIHEAP recipients from having to pay the state’s 7 percent sales tax tacked on to utility bills. That would have resulted in the loss of about $4 million in tax revenues to the state.

So Sen. Luke Kenley, an influential Republican member of the State Budget Committee, proposed another idea: Use some of the mortgage fraud settlement fund set aside for the state to boost the declining LIHEAP funding. Kenley also wanted to set up a separate trust fund for the money, so it couldn’t be used for other purposes, as several states are currently doing.

Welch praised the idea as the kind of  “creative solution” that doesn’t often come out of the legislature.

The Indiana Community Housing Authority will determine whether the new money will be used to help more families or give the families who now receive assistance more help. About 160,000 low-income Hoosiers benefitted from the program last year.

Maureen Hayden is the Indiana Statehouse bureau chief for CNHI, the parent company of the Tribune-Star. She can be reached at maureen.hayden@indianamediagroup.com.

1
Text Only | Photo Reprints
Indiana Legislature
Latest News
TribStar.com Poll
AP Video
NASA Showcases Lunar Eclipse Ukraine: Military Recaptures Eastern Airport Pistorius Cries During Final Cross-Examination Raw: Kan. Shooting Suspect Faces Judge Raw: Storm Topples RVs Near Miss. Gulf Coast Tributes Mark Boston Bombing Anniversary Raw: Horse Jumping Inspires 'Bunny Hop' Police: Woman Stored Dead Babies in Garage India's Transgenders Celebrate Historic Ruling US Supports Ukraine's Efforts to Calm Tensions First Women Move to Army Platoon Artillery Jobs Michael Phelps Set to Come Out of Retirement New Tactic Deployed in Search for Plane The Boston Marathon Bombing: One Year Later Suspect in Kansas Shootings Faces Murder Charges Sex Offenders Charged in Serial Killings Scott Brown Announces Run for U.S. Senate in N.H Popular Science Honors Year's Top Inventions OC Serial Murder Suspects May Have More Victims Raw: Fatal Ferry Boat Accident
NDN Video
8-year-old Boy Gets His Wish: Fly Like Iron Man Toddler climbs into vending machine Much-Anticipated 'Gone Girl' Trailer Finally Debuts! (VIDEO) Dog and Toddler Wear Matching Outfits in Adorable Photo Series VP Biden: "World witnesses ordinary citizens doing extraordinary things" It's Official! Michael Strahan Joins "GMA" Blood Moon Time-lapse Actress Lake Bell Goes Topless The Five Weirdest Local Taxes in America Applicants Vying for 'World's Toughest Job' Get Heartwarming Surprise Awkward: Crist catches Lt. Gov. insulting him on camera NASA Showcases Lunar Eclipse US Airways Tweets Graphic Photo of Nude Woman Behind the scenes of the Marathon anniversary photo shoot American Airlines Responds After Girl Tweets Alleged Terror Threat 'Joke' Charlie White's "Dancing" Mistake Olympic Great & Baltimore Native Michael Phelps Ends Retirement; Eyes Rio 2014 NFL Draft: Potential Booms And Busts William and Kate Squash Baby No. 2 Rumors With a Wine-Tasting Trip Who Showed Up at Coachella?
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

     

    March 12, 2010

activity