Horne said thousands of homeowners will benefit from the $57 million pool, which will also pay for reducing the principal for underwater homeowners who can’t refinance and paying uncollected judgments obtained by the Attorney General from foreclosure rescue companies that didn’t meet their promises. Money will also go towards housing counseling and legal services for homeowners facing unjust foreclosures, Horne said.
Another $50 million from the same settlement is tied up in court after the Legislature swept it to balance the budget.
Horne said he had no idea how much of the $57 would be used for administrative costs. He also did not have a definitive date for when the programs would start, except to say it would be before February, the one-year anniversary of the settlement, and he would be monitoring it to prevent delays.
Horne said his office will have a better idea of those costs after it gets responses for procurement requests to get advice on how to administer some programs and to manage some of them.
He said there should be no problem finding program recipients because foreclosures are still running at a high level.
“I think we’ll have the opposite problem, which is the $57 million won’t go far enough,” Horne said.
Some of the benefits, such as principal reduction, will cost $25,000 per individual or more, while others are less expensive, such as short-term loans to help homeowners catch up on mortgage payments.
Horne said people who walked away from their underwater mortgages or housing market speculators who walked away after being unable to recoup their investments won’t be eligible for the pool of money.
The money came from a $98 million settlement with mortgage lenders and a separate $10 million settlement between the state and Bank of America.
The Legislature took $50 million from the settlement to help balance the 2013 state budget.
The Arizona Center for Law in the Public Interest filed a lawsuit on behalf of homeowners, alleging the transfer violated terms of the settlement. The case is pending. What is the status of the lawsuit?
$57 from a foreclosure settlement will be distributed in the following way:
Direct assistance to homeowners: $41 million
Enforcement and monitoring: $5 million
Housing counseling: $5 million
Legal services for distressed homeowners: $4 million
Marketing: $2 million