Law aims to resist court order to repay mortgage fund

SACRAMENTO, Calif. (AP) — A bill signed by Gov. Jerry Brown attempts to circumvent a court order requiring the state to pay $331 million to a special fund related to the mortgage crisis.

The legislation signed Monday stems from a 2012 settlement between states and leading mortgage servicers, related to their actions during the Great Recession.

California earned $410 million in the settlement and set it aside in a special fund to use for foreclosure assistance, housing counselors and other services.

Lawmakers then transferred most of it to the general fund to service debt on housing bonds. Three non-profits have sued, arguing the state improperly used the money.

An appeals court in July ordered the state to pay it back. The legislation aims to resist the court order.