(Update: All 50 states have now joined the mortgage foreclosure working group.)
(Phoenix, Ariz. -- Oct. 13, 2010) Attorney General Terry Goddard today announced that Arizona will join 47 other state Attorneys General in an investigation of mortgage servicing companies and home foreclosure documentation.
The investigation was prompted by disclosures of document signing practices that Goddard said may have violated the law. These practices involve the use of "robo-signers" -- employees who sometimes sign hundreds of foreclosure documents a day without reviewing their contents. Some of the nation's largest mortgage servicers have admitted that their employees have signed thousands of documents without knowing what's in them. In some states, affidavits and other documents were signed by people who did not have knowledge of the facts in them.
By opening an investigation that includes nearly all states, Goddard said the Attorneys General can pool investigative resources and work more productively.
The investigation initially will focus on whether mortgage servicers have improperly submitted documents in support of foreclosure. The facts uncovered in the investigation will dictate the probe's ultimate scope.
"It's shameful that this far into the housing crisis there are still serious questions about possible fraud in the foreclosure process and whether homeowners have been treated fairly," Goddard said. "This investigation will gather the facts and hold mortgage servicers accountable for following legal procedures and for working with borrowers in good faith to try to resolve issues short of foreclosure. I have been prosecuting mortgage fraud for the past several years, and I will not hesitate to take legal action against any lender found to have engaged in fraudulent practices."
Goddard also stated that he supports the voluntary actions of some lenders to place a moratorium on foreclosures until they have completed a careful review of their procedures.
Goddard noted further that his recent agreement with Wells Fargo Bank, which will provide more than $150 million in mortgage relief for Arizona homeowners, should set a new standard for other financial institutions in helping consumers stay in their homes. Under that agreement, at least 1,700 Arizona borrowers who took out payment option adjustable rate mortgage loans, also known as POAs, will be eligible for loan modifications.
For more information, contact Steve Wilson at (602) 542-8351.