Cuomo to Split JPMorgan N.Y. Settlement Money with Schneiderman
Governor Andrew Cuomo and Attorney General Eric Schneiderman agreed to split the first $163 million of New York's $613 million share of a settlement with JPMorgan Chase over mortgage bond sales, according to their offices.
The two Democrats had been dueling over the funds, a piece of a $13 billion federal-state settlement with the bank. The deal worked out between the two officials directs about $81.5 million to Cuomo's control, where it'll go toward housing programs, according to Rich Azzopardi, the Cuomo spokesman.
The remaining $81.5 million will be distributed by Schneiderman's office to anti-foreclosure programs, Matt Mittenthal, a spokesman for Schneiderman, said in a statement yesterday.
"This agreement on the first year of funding for the JPMorgan settlement will provide help to those who have been hurt most by the housing crisis, and make certain that this money will be dispersed with maximum accountability and oversight," Azzopardi said in an emailed statement.
In November, JPMorgan settled federal probes into the bank's sale of mortgage bonds that officials said helped fuel the financial chaos of 2008.
An earlier pact Schneiderman reached with JPMorgan allowed him to spend 85% of the money over four years to reduce foreclosures, prosecute financial fraud and promote investors' interests, giving the state treasury no more than 15%. The first drawdown was set at $163 million for November 2013, according to the agreement signed Nov. 19.
Cuomo's office contended that the structure of the deal gave the attorney general too much leeway and too little oversight over the funds. The accord struck yesterday requires the attorney general to go through the state contracting process, and the reviews that come with it, when spending the funds, Azzopardi said.
The attorney general "looks forward to using his discretion to allocate funds from this and future bank settlements in an open and transparent way to help as many New York families as possible," according to the statement from Mittenthal.
The money will be directed to several programs, according to Schneiderman's office. Some will be used to fund subsidies to reduce principal, and refinance and guarantee mortgages in exchange for loan modifications. Another part will help finance a program created by Schneiderman in June 2012 that provides homeowners with legal counseling to help avoid foreclosure. The funds will also help support development by nonprofit groups that assemble land from foreclosures, according to the office.
Cuomo will propose his fourth budget today.