Critics: Attorney General Tom Horne's plan to help illegal foreclosure victims 'too little too late'

Attorney General Tom Horne announced his plan to distribute millions of dollars Arizona got from a national settlement with five large banks accused of foreclosure fraud and abusive mortgage practices.

"There are few things more important than helping people who are in danger of losing their homes," Horne said.

His announcement comes just two days after the ABC15 Investigators exposed why not a single dime of the settlement money had gone to Arizona victims yet.

It was February 2012 when Horne stepped to the microphones to say the state's share of the settlement would be $110 million, but today Horne divulged programs to use only $57 million to help homeowners.

Why did it take so long and how did $110 million become $57 million?

Horne says the state legislature swept $50 million of the settlement for the state budget and lawmakers made him wait 16 months until they appropriated the money for his programs.

The Attorney General says he was powerless to prevent the delay or the legislature's sweep.

But the former head of Arizona's Department of Financial Institutions who has prosecuted mortgage fraud and is running against Horne for Attorney General says it's too little too late.

"Allowing those funds to just be swept and then a year plus to go by because he waited for the funds to be appropriated—that's not acting in the best interests of Arizona," said Felecia Rotellini. 

Rotellini is also critical of the way Horne plans to use the remaining funds.

She told us, "One of the saddest aspects of the program that's being implemented is they are putting $2 million towards public relations and outreach over a three-year period."

"That's $2 million that could be used right now to keep homeowners in their homes," Rotellini claims. 

Horne touted the fact that victims of foreclosure fraud and abusive mortgage practices would be receiving checks for $1480 saying that was far more than what was originally thought possible.

The Attorney General said 65,000 victims in Arizona would get that money from the national settlement. 

"This is one of the few cases where government is performing more than what was promised rather than less," he said.

Asked today if he could have done more for Arizona homeowners, Horne said, "No."

He said victims will be getting checks from his programs by August.

Horne's plan includes $41 mil for direct assistance to families and restitution—funds to help keep people in their homes. 

He's also setting aside $2.5 mil for relocation costs for those who are not able to stay in their homes.

Veterans and disabled Americans will be helped with $3.5 mil from the settlement.

Horne has already set up a program to provide mortgage counseling services at a cost of $5 million.

He's contracted with a non-profit agency to provide legal services for victims who are fighting illegal foreclosures and he set aside $4 million for that objective. 

Horne's plan also includes $5 million for continued enforcement efforts to make sure the banks are living up to their promises not to repeat abusive behavior. 

But the Attorney General wouldn't answer a question about whether or not his office currently has any ongoing investigations into illegal foreclosures. 

ABC15 has spoken to numerous homeowners in the Valley and their lawyers who are currently fighting foreclosures based on forged and fraudulent documents—every one of them says they have contacted the Attorney General's office but received no help.

Horne is also tucking away another $5 mil from the settlement funds for "Reserves for Changing Needs". 

Horne's opponent in next year's election accuses the AG of abandoning the victims of illegal foreclosures and abusive mortgage practices.

"Sixteen months later he's just now unveiling a plan to help get money to homeowners," Felecia Rotellini said, "these are folks who have been victimized by the system, by the lack of regulation and now by incompetent enforcement."

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