Terry Goddard (D)
PHOENIX, Ariz. (Legal Newsline)-A week after saying U.S financial institutions could face another round of multistate lawsuits over their lending practices, Arizona Attorney General Terry Goddard will be in Washington on Thursday to meet with executives from some of the nation's largest banks.
The goal of the meetings is to minimize the next wave of foreclosures facing homeowners and commercial mortgage borrowers, the Democrat said.
"I am committed to working with the national lenders on Wall Street, especially those that received government bailout money last year, to pass more of those benefits along to consumers and businesses along Main Street," Goddard said in a statement.
Goddard's office declined to disclose which banks the attorney general will meet with this week, except to say they are "major national lenders."
While in Washington, Goddard will also have meetings with members of Arizona's congressional delegation to urge them to help preserve states' rights to pursue legal action against unscrupulous lenders.
The meetings come as the White House is pushing for amendments to federal financial regulations that would hamstring state attorneys general when it comes to enforcing state laws against nefarious lenders.
In an interview Thursday with Legal Newsline, Goddard said there is "possibility" that lenders could face multistate litigation over their procedures for modifying home loans for struggling buyers.
"It's been frustrating," Goddard said. "Banks have been very slow to make modifications."
Arizona is among states with the highest rates of home foreclosure, tracking data indicates.
Goddard, who is widely expected to run for governor next year, said banks' unwillingness to offer speedy loan modifications has created a "wave" of consumer frauds by firms promising struggling homebuyers that they can save them from foreclosure.
The Obama administration has a $75 billion home loan modification program, which officials had hoped would help about 4 million delinquent homeowners this year.
But so far, only about 650,000 people have had their mortgage payments temporarily adjusted under the Making Home Affordable plan, while only a fraction of those have received permanent modifications.
As of Sept. 1, about 1 percent of all trial mortgage adjustments were made permanent after three months, according to the Congressional Oversight Panel, which monitors the U.S. Treasury Department's bailout funds.
The combined percentage of loans in foreclosure or at least one payment past due was 14.4 percent in the third quarter, the highest percentage ever reported by the Mortgage Bankers Association.
In February, State Foreclosure Prevention Working Group urged federal officials to push national banks and federal thrifts to modify home mortgage loans.
In their letter to U.S. Comptroller of the Currency John Dugan and director of the Office of Thrift Supervision John Reich, the group of attorneys general and state regulators said loan modifications would help many Americans remain in their homes by avoiding foreclosure.
Goddard spoke to Legal Newsline at the conclusion of the three-day winter meeting of the National Association of Attorneys General, where he said the nation's mortgage meltdown was the "biggest consumer topic on the table."
From Legal Newsline: Reach staff reporter Chris Rizo at firstname.lastname@example.org.