Rotellini’s Record of Failure with State Banking Department
Mortgage Fraud Skyrocketed; Arizona Homeowners Lost Everything
The Arizona Department of Financial Institutions (ADFI) exists to protect consumers and ensure “the safety and soundness of the financial services industry in Arizona.”
But, under Democrat Felecia Rotellini’s watch as agency Supervisor (2006-2009), the State of Arizona became Ground Zero for the kinds of mortgage fraud and lending scams that ultimately brought the entire housing market crashing down.
According to the Mortgage Asset Research Institute Fraud Index, a comprehensive measure of lending fraud, Arizona ranked 21st in the country for this kind of illegal activity in 2005. By the time Rotellini resigned from her post as financial watchdog for ADFI in summer 2009, Arizona’s rate of mortgage fraud had skyrocketed to 4th in the nation, trailing only Florida (1), New York (2) and California (3).
“Felecia Rotellini portrays herself as a fierce and independent prosecutor, but she has a record of failure when it comes to protecting Arizona consumers,” said Mark Brnovich, Republican nominee for Arizona Attorney General. “Arizona became a national leader in lending fraud during Felecia Rotellini’s failed tenure as head of the State banking department, and Arizona families paid the price as foreclosure rates skyrocketed and home values plummeted. These are the facts in black and white. Given the kid-gloves treatment Felecia Rotellini gave these banks, it’s no surprise she left her position as a government regulator and immediately went to work representing these same institutions in front of the State banking department she had just departed.”
Notably, during a televised debated Tuesday evening on KAET-Arizona PBS (FF to 24:10), Ms. Rotellini refused to acknowledge the lending fraud statistics. Immediately following the debate, she told reporters: “I don’t think those facts are right.”
For the record, this is the Fraud Index that Ms. Rotellini wishes didn’t exist: