A new Arizona law that took effect July 29 makes it illegal for financial service providers to charge big up-front fees to counsel people experiencing home foreclosure, Attorney General Terry Goddard said Saturday in Ahwatukee Foothills.
"If somebody tries to do that to you, as soon as they say that, please get on the phone to the Attorney General's Office," Goddard said. "We very much want to go after them."
There have been thousands of such cases in the state, where firms have charged desperate homeowners up to $4,000 for counseling, and then have failed to provide any services, he said. Firms that use the tactic now could be found guilty of a Class I misdemeanor, he said.
Goddard's comments came during a public workshop on foreclosures at the Pecos Community Center, 17010 S. 48th St.
"We've had some really bad twists and turns in the mortgage market the last couple of years," he said. "I wish no family had to go through this process, but you're in the right place."
The workshop was organized under the aegis of U.S. Rep. Harry Mitchell (D-Ariz.), who also made an appearance on Saturday. Robbie Sherwood, Mitchell's spokesman, said the event attracted about 63 families.
The purpose was to connect distressed homeowners with counselors from the U.S. Department of Housing and Urban Development and other agencies that could help them deal with foreclosure, Sherwood said.
"It's definitely an ongoing problem," he said. "Folks are finding themselves in a tough situation."