Arizona Attorney General Terry Goddard quipped that Arizona was not behind in at least one national measure: the number of mortgage rescue fraud schemes.

Arizona Attorney General Terry Goddard quipped that Arizona was not behind in at least one national measure: the number of mortgage rescue fraud schemes.

“We are doing very well,” in that, he said.

Goddard said that statewide, “Arizona is experiencing a foreclosure rate 10 times normal.”

With mortgage foreclosures on the rise, the amount of homes listed as “preforeclosures” is skyrocketing.

As of April 24, according to Foreclosures.com, the number of homes in preforeclosure for Yavapai County was 263. In Arizona, the number is 8,294.

A home is considered in “preforeclosure” after the mortgage holder misses a second consecutive payment, Goddard said.

“A notice usually goes out then. That’s how the fake rescue schemers find their victims,” he said.

A preforeclosure house can be seen on lists for several months, even more than a year. Or it can keep going on and off the list as the mortgage holder finds ways to stave off full  foreclosure, Cottonwood Real Estate broker Phil Terbel said.

Local Realtors and lenders have attended classes at the Countrywide Home Loan offices in Sedona presented by fraud specialists from the state attorney general’s office.

Local lender Mike Fuller, of Northern Arizona Mortgage, said, “There are more notices of default in the newspapers, yes, but my borrowers have found other ways to keep their homes.”

Fuller said he wrote more than 450 loans in 2005 and 2006, and he has received notice of four that are in default, he said.

“I just do not see it or hear about it,” he said in regard to the huge increase in foreclosures locally.

An example of a mortgage “rescue” scheme is when Goddard announced a settlement in December 2006 with Deed and Note Traders, a Tucson-based “foreclosure assistance” company.

The settlement resolved allegations that the company’s HomeSavers program was deceptive in offering consumers who faced foreclosure a simple way to save their homes.

The complaint alleged that DNT targeted consumers in foreclosure and paid them a nominal amount of money, in one case, $25, for their homes, then permitted the consumers to lease back their homes and re-purchase them in about 24 months. The state alleged that the HomeSavers program was deceptive and misleading because DNT did not save consumers’ homes, and in most cases, the consumers were evicted.

The settlement requires the company to change its business practices and pay restitution to customers who took part in the HomeSavers program.

The settlement required DNT to provide to eligible consumers who are no longer living in their homes restitution equal to the equity lost to DNT. Refunds will range from $1,709 to $43,566.

In addition, DNT is prohibited from engaging in any type of “foreclosure assistance.”