California Gov. Jerry Brown violated state law by diverting more than $331 million in mortgage settlement funds for uses unrelated to housing, a Superior Court judge ruled.

The judge's decision was a victory for organizations representing blacks, Latinos and Asian Americans, which sued the Democratic governor in March 2014. While Judge Timothy Frawley stopped short of ordering that the housing funds be restored, he did rule that Brown and the state legislature are obligated to replenish the diverted money.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.