Ala. Legislature will fund AG's office budget in 2013

Jessica M. Karmasek Apr. 11, 2012, 9:50am



MONTGOMERY, Ala. (Legal Newsline) - The Alabama Legislature will be including an allotted budget for the state Attorney General's Office in its plan for the 2013 budget, after all.

State Sen. Arthur Orr, a Republican, said in a phone interview Tuesday that there was a "misunderstanding" that Attorney General Luther Strange's office would receive all $25 million of its cut from the national mortgage settlement in time for the budget year.

However, that is not the case, said Orr, who also is the chairman of the Senate's Finance and Taxation General Fund Committee.

"Come to find out, it's going to depend on the settlement's time table," he said.

According to a news report earlier this week, the House Ways and Means General Fund Committee had passed a plan for the 2013 budget last week that did not include an allotted budget for Strange's office.

The plan was for the money that Strange's office would receive from the nationwide settlement to serve as its funding for 2013. The State, in turn, would not give Strange's office any money.

"If they had that amount ($25 million), that's more than they usually receive," Orr said of lawmakers' thinking.

But now it looks like the Legislature will be forced to provide some funding.

Orr explained that he was told the payout from the nationwide deal will occur over a three-year period.

"The House chairman is amending the plan on the floor of the House to address the situation," he said. "We'll definitely have to allot some funds, but still take into account the settlement payments. It definitely won't be zero."

No matter what, Orr said the Attorney General's Office will be provided with enough funds to keep operating.

Strange's office, meanwhile, said it is taking a wait-and-see approach to the situation.

"Obviously we are concerned about our budget and are watching the legislative proceedings closely," Joy Patterson, a spokeswoman for the Attorney General's Office, said in an email Tuesday.

"We are involved in the most important legal issues affecting the state -- defending the immigration law, holding BP accountable for the oil spill, fighting illegal gambling -- so it is essential that our office be fully funded."

In February, federal officials and 49 state attorneys general, including Strange, reached a $25 billion agreement with the nation's five largest mortgage servicers.

Talks between the attorneys general, federal officials and the five banks -- Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp. -- dragged on for months before a deal was finally struck.

The probe, which began in October 2010 with inquiries into so-called "robosigning" practices, later broadened into identifying and addressing additional alleged improper foreclosure practices.

In many states, much of the settlement money is already earmarked to help those struggling homeowners.

In West Virginia, for example, of the more than $33 million in assistance it will receive, an immediate estimated payment of $2,000 will go to each state homeowner who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.

More than $18 million will go to loan modifications and benefits to homeowners currently in default or foreclosure.

More than $5 million will go to free refinancing for "underwater" but current homeowners.

Another $6 million will go to foreclosure and mortgage assistance and prevention programs in the state.

Orr said he was not sure of Alabama's plan for its settlement money.

From Legal Newsline: Reach Jessica Karmasek by email at

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