Arizona Real Estate

Arizona to receive a $21.5 million settlement from Standard & Poor’s

Arizona to receive a $21.5 million settlement from Standard & Poor’s

The 2008 sub-prime mortgage collapse is not something title companies like to talk about, but every cloud has a silver-lining, and this one comes in the form of a settlement payment from a rating agency tied to the collapse. Standard & Poor’s, which was accused of issuing inflated ratings on securities that contributed to the housing collapse will reimburse the state of Arizona with $21.5 million, just a slice of the $1.38 billion settlement.
Attorneys general from 19 states and Washington D.C. joined forces with the U.S. Department of Justice to take legal action, arguing that S&P issued inflated ratings from 2004 to 2007 to please companies that sold the securities to investors. Issuing these higher ratings allowed them to pay lower, unjustified interest rates while attracting a wider pool of investors.
A statement from Arizona Attorney General, Mark Brnovich, stated that S&P continually assured investors that it had measures in place to sustain the objectivity of their ratings. Arizona went on to sue the company in February 2013, but S&P denied any wrongdoing. Arizona will use the money for programs that benefit children, seniors and public safety.
It’s not just S&P that contributed to the 2008 collapse, but many big names including Moody’s Investors and Fitch Ratings have also been blamed for fueling the crisis. The exaggerated ratings made it possible for the banks to sell countless dollars’ worth of those securities.
Judicial experts believe that this case gives precedence and can act as a template for when states go after other rating agencies. It will be interesting to see how the proceedings will play out and how this could further impact the state of Arizona.
If you are in the market to purchase commercial or residential real-estate it is imperative to do your homework and choose a title company that can effectively and efficiently facilitate the process. At Landmark Title we pride ourselves on being more than just a title company to our clients, we are resource. For information on our services please call (602) 748-2800 and a member of our team will point you in the right direction.

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