The foreclosure crisis continues to present a major roadblock to Arizona's economic recovery. Its central role in our State's economic downturn makes it all the more critical that we do everything we can to reduce foreclosures and increase loan modifications, while also stopping the spread of mortgage "rescue" schemes and loan modification fraud.

My Office is working hard on both fronts.

I traveled to Washington last week for another meeting with executives of several major banks to discuss ways to minimize the ongoing avalanche of foreclosures facing homeowners and commercial mortgage borrowers. The nation's leading lenders simply have not made the effort necessary to stabilize the nation's housing market. Federal data released Thursday underscored how poorly the banks have done in making permanent loan modifications. Only about 4 percent, or 31,382 of the 728,000 homeowners currently in the federal Making Home Affordable program, have moved into permanent modifications.

That's a pathetic statistic, and in addition to frustrating hundreds of thousands of families, it creates more potential victims for fraudulent loan modification schemes that prey on homeowners' financial desperation.

Efforts on both the state and federal level to stop these scam artists are increasing. The Criminal and Consumer Protection Divisions of my Office have made foreclosure fraud a top priority, have successfully prosecuted several cases and have more in the pipeline. The Arizona Mortgage Fraud Task Force has become a model of effective state and federal collaboration. The Obama Administration's creation last month of a National Mortgage Fraud Task Force will add significant resources to charge and prosecute phony operators who cheat homeowners out of their last bit of cash in exchange for empty promises.

Earlier this month, I participated in a live homeowner assistance call-in program devoted to loan modification scams on KTVW Univision 33. Since these frauds have disproportionately targeted Hispanic neighborhoods, this Spanish-language program provided an excellent opportunity to give homeowners useful information about where to file a complaint, how to get counseling help and how to avoid becoming a victim. The huge response -- more than 850 calls were taken -- was one more clear sign of how widespread mortgage fraud has become in our State.    

Easing the foreclosure crisis and stopping mortgage fraud are both large, multi-faceted challenges. I am committed to using the full authority of the Attorney General's Office to help Arizona homeowners, stabilize the state's housing market and strengthen our economy.

 

Terry Goddard