On July 27, 2017, the Arizona Attorney General’s Office (Arizona AG) announced that it had obtained a judgment against an allegedly fraudulent mortgage relief company and its owner. The company is alleged to have targeted homeowners who were considering defaulting on “upside down” mortgages. The company purportedly promised to take over the mortgages with tenant buyers who would live in the houses and whose ultimate goal would be to purchase the home. According to the Arizona AG, the company failed to make promised mortgage payments or apply the tenants’ payments to the mortgages, causing the homes to go into foreclosure and negatively impact the homeowners’ credit ratings.
The Arizona AG obtained the judgment after neither the company nor its owner contested the lawsuit. The company must pay over $240,000 to the state for restitution, civil penalties, fees, and disgorgement. The company and its owner are also barred from engaging in real estate related activity in the state.