Banks Must Do More to Help Struggling Homeowners, Goddard Says

(Phoenix, Ariz. – Sept. 23, 2010) Noting a sharp increase in home foreclosures, Attorney General Terry Goddard today urged lenders to work more aggressively with homeowners to stem the foreclosure tide. 

Arizona foreclosures rose from 3,100 in August 2009 to 4,000 this past August, an increase of 29 percent. During the past month, foreclosure sales accounted for 45 percent of the existing home market activity in the Valley. In Phoenix, an estimated 51 percent of homes are currently under water financially. 

In a speech today to the Arizona Land Title Association, Goddard said responsible lenders must step up and offer affordable programs to help more families survive the housing crisis. 

"It is in the best interest of banking institutions to help us turn this sinking ship around and keep people in their homes and maintain property values," Goddard said. 

The Attorney General also warned of fraud artists seeking to take advantage of the crisis. 

“Many homeowners who are frustrated by slow responses to their applications for loan modifications turn to deceptive companies who falsely claim they can prevent the foreclosure or modify their mortgages,” Goddard said.

“Attacking mortgage fraud has been one of my top priorities. I led the way to pass a law eliminating upfront fees that scam artists were charging homeowners to modify their loans.  We will continue to aggressively pursue these fraudsters and shut them down.  But we can’t do it alone.  Our financial institutions must help restore confidence with homeowners by stopping the epidemic of foreclosures. I renew my call for lenders to offer principal reductions and payment deferrals to keep more Arizonans in their homes and stop the slide of property values.”