Goddard reaches settlement with foreclosure rescue firm

Legal News Line Sep. 24, 2008, 12:02am

Terry Goddard (D)

PHOENIX, Ariz. (Legal Newsline)-While other attorneys general wrangle with financial giant Bank of America in an effort to curb the current housing crisis, Arizona Attorney General Terry Goddard this week landed a smaller fish in the ocean of fraudulent foreclosures.

On Tuesday, the Democratic attorney general announced a settlement with Tucson, Ariz.-based Harvest Properties Inc. that will return $350,000 to about 100 homeowners.

Goddard sued the company for an alleged foreclosure rescue fraud the company offered to people facing the loss of their homes.

The settlement does not constitute an admission of wrongdoing, the attorney general's office said in a statement.

"Consumers have the right to expect that they are being told the truth and are receiving a fair deal," Goddard said following the settlement terms being accepted by the court. "Especially in these difficult economic times, I will aggressively pursue anyone found to be deceiving Arizonans who are in or facing foreclosure."

Attorneys general in California, Illinois, Florida, Connecticut and West Virginia have issued high-profile lawsuits against Bank of America, parent company of Countrywide Financial Corp., over its alleged predatory lending practices.

The lawsuits have attracted national attention, particularly in recent weeks as news of many financial institutions reeling from enormous debt caused by the housing crisis.

Goddard has not sued Calabasas, Calif.-based Countrywide.

According to court documents, Harvest Properties negotiated "short sales" with homeowners who had fallen behind on their mortgage payments between the period of November 2003 and June 2006.

As part of the negotiations, the company would agree to make the loan payments under the homeowner's name, leading many people to believe the company had assumed the loan, when in fact their credit was damaged by the lack of payments.

Goddard said he believed that during these transactions, Harvest deceived or concealed crucial facts harmful to the consumer making an informed decision.

In addition to the financial terms of the settlement, Harvest must comply with a series of terms dealing with informing customers of its practices and complying with the Arizona Consumer Fraud Act, Goddard's office said.

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