Price Law Group - Arizona Articles Arizona Legislature Diverts Foreclosure Funding

Arizona Legislature Diverts Foreclosure Funding

By Price Law Group  Dec. 14, 2012 9:20a

States Use Funds From Robo-Signing Settlement To Fill Budget Shortfalls

In a report released by a national economic watchdog group, analysis indicates that many states, including Arizona, have chosen not to honor the agreement made in the National Mortgage Settlement. State governments were awarded $2.5 billion in the settlement to use for relief efforts and programs to help those hit by the foreclosure scandal.

According to the report, the agreement was made as part of a deal between the federal government and several of the nation's largest lenders and firms. The firms had been accused of a wide variety of prohibited practices, including rushing foreclosures without properly verifying paperwork. The so-called robo-signing scandal was costly for the firms, who were forced to pay about $20 billion to victims, as well as an additional $2.5 billion to be split amongst state governments for mortgage relief.

Once that money reached the state legislatures, however, many chose to divert most or even all of the funds for other purposes. Rather than budgeting the money for relief programs designed to help the people hit hardest by the foreclosure crisis, Arizona legislature, along with other states, chose to use the funds to plug existing holes in their budgets.

Consumer Advocates Respond To Decision

Calling the decision not to honor the agreement "short-sighted", one author on the report said that it was the responsibility of the legislators to respect the intent of the settlement. Ignoring the intended purpose of the funds would disproportionately hurt the poor, who have been hardest hit by the mortgage crisis.

"When these states get this money and dump it into their general coffers, it means that they're not benefiting the very people that were victimized in any kind of responsive way. It's not that these mortgage abuses occurred randomly," the consumer advocate opined. "They targeted some of the most vulnerable communities intentionally, and now that some measure of remedy has been extracted from the banks, it's appalling that some states are not targeting that toward fixing the problems."

According to government reports, the Arizona government chose to pull $50 million from their settlement towards other purposes. At least thirteen other states have also decided to use less than half of their funds for housing relief. Of the 50 states, only Oklahoma chose to opt out of the settlement.

An Attorney Can Help You Today

If you are struggling with the prospect of having your home foreclosed upon, it is imperative that you contact a trained professional you can trust. At the Price Law Group, our team has the experience and skill necessary to battle hard on your behalf, challenging the lenders to behave honestly. Do not allow your home to be taken away without a fight! Contact our firm or visit our website before it is too late.

Other Recent Articles

Debt Liquidation Vs Debt Consolidation

One of the most common decisions our clients must grapple with when attempting to file for bankruptcy is the seeming simple choice of which form of debt relief to file under.
More Articles »

The Means Test: Qualifying For Chapter 7 Bankruptcy

If you, like many Americans, are struggling financially in these difficult times, there is hope on the horizon.
More Articles »

Chapter 13: Debt Consolidation and You

According to statistics released by the US Government, more than a million people filed for bankruptcy in 2011.
More Articles »
(866) 210-1722
1811 South Alama School Rd #205
Mesa, AZ 85210

Office Hours:
Mon.-Fri. 9am-5pm

Main Website:
View Website
Contact our office by email by clicking the button below: