In January of this year, Catherine Reagor drew the attention of Arizona government with her article on mortgage fraud:
A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals.
Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona’s real estate market.The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated. Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy.
Two days later, legislation was introduced to fight the fraud:
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