Judges to hear arguments on partial sweep of fund for homeowners

November 26, 2012

A three-judge panel is set to hear arguments on whether the state legislature had the right to take money out of a fund for struggling homeowners. The money came from a multi-state settlement involving the mortgage practices of several major banks. It was supposed to be used for things like reducing preventable foreclosures and stopping mortgage fraud, but the legislature swept $50 million of the money into the state’s general fund to help balance Arizona’s budget.

Last month, a Maricopa County Superior Court judge ruled the legislature had every right to take the money. Monday morning, a three-judge panel of the state appeals court is scheduled to hear arguments on the case.

The lower court judge ruled the legislature decides how to spend state money, but opponents of the move say the attorney general, who’s the fund’s trustee, could decide how the money is used.

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