Lawmakers allocate money for state's foreclosure victims
The money for the financial fraud unit would pay for four full-time, temporary positions - an attorney, investigator, managing financial analyst and paralegal - and a part-time secretary.
The unit would investigate and prosecute mortgage fraud and other financial improprieties such as the Finance Resources Management's closing after bilking investors out of millions of dollars in a Ponzi scheme.
The Joint Legislative Fiscal Committee approved the $6 million for contracts with the New Hampshire Housing Finance Authority and New Hampshire Legal Assistance, but agreed to discuss the new fraud unit after the new legislature is in place in January.
Senate Finance Committee Chairman and fiscal committee member Sen. Chuck Morse, R-Salem, said they should approve the money so mortgage victims could receive help, and they could discuss the new positions for the fraud unit later.
Deputy Attorney General Ann Rice said that was a "workable solution."
She noted two legislative study committees have noted the need to strengthen the department's ability to investigate and prosecute financial fraud.
"Right now we don't have the people nor the legal skills needed to do these kinds of investigations," Rice told the committee.
She said the unit would handle more than mortgage fraud, noting the state may have lost millions of dollars in real estate transfer taxes.
Morse noted the House and Senate members disagreed on how to proceed so as a compromise, they would put off any decision on the fraud unit.
The money for the unit and help for foreclosure victims comes from a national settlement with five large national banks over illegal or unethical foreclosures practices.
New Hampshire was among 49 states that signed an agreement with the five of the largest banks in the country - Bank of America, Citibank, Wells Fargo, J.P. Morgan Chase, and GMAC/Ally - to settle claims involving their mortgage servicing and foreclosure practices.
The banks agreed to send $25 billion to consumers and the states, with $20 billion in direct benefits to borrowers, mostly through change of terms.
New Hampshire's share will be $44 million, with approximately $34 million in direct relief to borrowers.
The state will receive $10 million which will be used to help the current victims of mortgage foreclosures, for a data-sharing system between the Insurance Department, Banking Department and Attorney General's Office and establishing the financial fraud unit.
Of the $6 million approved Thursday, New Hampshire Legal Assistance will receive $3.5 million and New Hampshire Housing Finance Authority will receive $2.5 million over three years.
The Executive Council already approved the request.
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Garry Rayno may be reached at email@example.com.