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Terry Goddard Announces Free Help for Struggling Homeowners

(Phoenix, AZ- Jan. 14, 2010) - Attorney General Terry Goddard today announced that the State will provide a substantial increase in assistance for Arizona homeowners facing foreclosure as a result of a consumer fraud settlement with the Attorney General’s Office.

Twelve nonprofit housing counseling entities in Arizona will receive a combined $1.3 million from a multi-state consumer fraud settlement last year with Bank of America (which acquired the defendant, Countrywide). The money will be used to hire additional staff and counselors to work with homeowners on foreclosure alternatives, as well as provide counseling help for consumers at risk of losing their homes.

The settlement resolved allegations that Countrywide, prior to 2008, used unfair and deceptive tactics in its loan origination and servicing activities and placed borrowers in structurally unfair and unaffordable loans.

The amounts being awarded to Arizona community groups will help homeowners in Phoenix, Tucson and underserved regions of the state, including rural counties. (See the attached sheet for community groups and dollar amounts.)

“It is our hope that these settlement funds will have a positive impact on families throughout the state who are in great need of counseling assistance to help them stay in their homes,” Goddard said. “The problem is so acute that additional staff can make a big difference.  Homeowners should exercise great caution before paying for any foreclosure “rescue” services. More helpful services are being provided for free by these HUD-approved housing counseling agencies.”

Arizona continues to be at the center of the housing crisis, along with Florida, California and Nevada. About 6 percent of all housing units in Arizona received a foreclosure filing in 2009. National data released today show a record 2.8 million households were threatened with foreclosure notices last year - a 21 percent increase over 2008. About 20 percent of all mortgages nationally are “under water” with negative equity; in  Arizona, the estimate is 68 percent.

“Until the housing crisis is resolved, the Arizona economy cannot fully recover,” Goddard noted.

Free help is available to homeowners who have questions or need help working through their housing situation form the Arizona Foreclosure Prevention Helpline at 1-877-448-1211.  Callers will be directed to local housing counseling agencies approved by HUD.

Arizonans who believe they have encountered fraudulent activity through so-called "rescue" scams can file a complaint with the Arizona Attorney General’s Office, Consumer Information & Complaints, www.azag.gov or 602-542-5763 (Phoenix); 520-628-6504 (Tucson) 800-352-8431 (outside Phoenix or Tucson metro area).

For additional information, contact Molly E. Edwards at (602) 542-8019.