When the federal government and forty-nine states reached a settlement on mortgage fraud earlier this year, $3.5 billion was earmarked as state aid, which was to be provided to homeowners to help them avoid foreclosure and retain legal counsel—and which the state was supposed to use to prosecute additional mortgage fraud. 

This is important money for many reasons—one being that while the settlement gave the banks immunity from federal and state action, it offered no such immunity for individual cases, and these funds can be crucial in helping aggrieved homeowners battle wealthy bank lawyers.

But several states are re-appropriating that money for other causes. In Arizona, Governor Jan Brewer, a Republican, and the conservative state legislature recently announced a plan to take $50 million of the state’s $97.8 million cut of the settlement and use it to plug holes elsewhere in the budget—created, in part, by large corporate tax cuts.

Though Arizona had the highest foreclosure rate of any state in March—and even though half of the state’s homeowners are underwater—State Senate President Steve Pierce recently said the money’s intended uses are a “low priority” for the state.

Representative Raul Grijalva of Arizona, a co-chair of the Congressional Progressive Caucus, blasted the re-appropriation yesterday as “the best way to make sure homeowners never see the justice they were promised.” He’s trying to get people in the state to pay attention to what’s happening and pressure their legislators.

“Working families were given the short end of the stick, and now Governor Brewer and the Legislature won’t even let them have that,” Grijalva said. “This decision takes away the one chance Arizonans had to get some help navigating the banking bureaucracy that greased the skids on millions of foreclosures. It’s a clear statement of principles, that’s for sure.”