Friday, May 25, 2012

Lawsuit seeks to stop AZ Legislature from raiding mortgage fraud settlement

An attorney for two East Valley homeowners at risk of losing their homes asked a judge Thursday to block lawmakers from raiding a special fund designed to help prevent foreclosures.

Tim Hogan of the Center for Law in the Public Interest said the state was given $97 million as part of a nationwide settlement of a mortgage fraud claim against five major lenders. He said the part of the deal signed by Attorney General Tom Horne requires the cash to be put into a special trust fund to be used only for specified purposes.

But the Legislature decided to take $50 million of that to help balance the state budget, a move approved by Gov. Jan Brewer. And while Horne expressed displeasure, he never challenged the move.

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