The issue of the mortgage settlement between financial institutions and U.S.

sta tes has been the focus of debate since it was first proposed. Before, the argume nts center on whether it should be accepted and whether it is punishment enough for wrongful foreclosures committed by certain lenders. Although some deemed it too light a punishment for banks involved in erroneous f oreclosure processing, the deal still went through. Now, the debate is focused o n another area of the settlement. This time it is about who gets what and whethe r those who get some deserve it. The Fight Over the Payment It is now a moot point whether the $26 billion that banks paid to U.S. states to settle allegations of mortgage fraud is enough or not, given that the settlemen t did push through and lenders have already paid the money. However, the mortgag e settlement issue is not over yet as another aspect of the agreement is now und er scrutiny. This time, it is about whether state politicians have the right to take a share of the money. The settlement is meant to help underwater homeowners or those whose mortgages a re worth more than the value of their homes. In most states though, legislative bodies are reportedly taking a cut from the settlement and using the money to pa tch up budget shortages. As expected, homeowners and homeowner advocacy groups a re not too happy. Court Battles Over the Money In Arizona, housing advocacy groups are attempting to have a lower court ruling overturned, which declared that it is legal for $50 million of the settlement to be handed out to the Arizona Legislature. State legislators, for their part, ha ve argued that the state also suffered, since the housing crisis resulted in low er tax collections. They claim that the money will be used to balance the state budget. The same battle is ongoing in several other states. In California, $410.5 millio n of the payment have reportedly been taken by the governor's office, while Geor gia's legislature has taken $99 million. However, not all state governments and legislatures are being accused of grabbing for some share. Colorado and Ohio hav e been praised by housing advocates for their decision to stick with the origina l plan of using the settlement payment for housing programs. Who Should Get the Payment? It is a fact that the settlement was meant to assist distressed homeowners in va rious areas of the country. It is also a fact that most states are suffering fro m budget deficits. However, homeowners' advocates are asking whether channeling part of the money into states' general funds is fair and justified. They assert that doing this will not help troubled homeowners and that the amoun t that most local governments are getting will not be enough to solve the budget deficit problems of most states anyway. Whoever will get the last say in this d ebate is still unsure, but it is to be expected that this will drag on for month s, or even years, before it gets resolved. Are you interested in Real Estate market news? Please read instructive blogs her e: www.ForeclosureDataBank.com