Arizona Legislature Considers Several Foreclosure Bills

The Arizona Legislature is currently struggling to approve the State’s budget for 2010 and is unlikely to consider a significant number of bills.  At one time it appeared there would not be enough time to consider any pending legislation.  It is possible that a budget might be approved in the near future, leaving time for the consideration of some legislation.  It is not known whether the following bills will be considered.

The following provides a summary of Foreclosure Legislation in Arizona along with commentary:

S1275: PROPERTY DEEDS; FORECLOSURES; ID
In every property deed recorded, if the new owner is a financial institution, corporation or partnership, certain information is required, including, the grantee's name, address and state (or country) where the grantee is chartered or incorporated.

Comment:  This bill has some traction. The League of Cities is supporting the bill.  Their goal is be able to contact the bidder at the foreclosure sale (usually the beneficiary) regarding conditions at the property (weeds, stagnant pools, etc.).  The bill currently obligates the trustee to add the required information to the trustees deed.  The sponsor of the bill is considering a request by UTA member Board Member Christopher Perry, Esq., Perry & Shapiro, to put the obligation on the purchaser.  If this passes, while it will be common practice for foreclosure trustees to attach the disclosure information to trustees deeds which go to their client, third party sale still do occur, and it is not reasonable for the trustee to have to get the information requested from the third party purchaser.

H2269: LANDLORDS; TENANTS; FORECLOSURES
If a rented residential property is being foreclosed, notification must be given to the tenants in a form substantially similar to what is given in this bill. Once title of the property is conveyed, the rights of the tenant to the property or to whatever prepaid rent or security may have been tendered are terminated.

Comment:  This bill requires all trustees to mail notice of the sale to the “current occupant” and gives tenants 30 days to vacate the property (as opposed to the current 5 days).  This bill may pass.

H2545: FORECLOSURES; TERMS; NOTICE
If a lender on a mortgage fails to negotiate in good faith with the owner of a residence subject to foreclosure regarding restructuring the terms of the loan (including providing contact information for housing counselors), the property will not be foreclosed upon for one year after the notice of foreclosure sale is recorded.

Comment:  This bill will be opposed if it starts to move forward and is not likely to pass.

H2601: FORECLOSURES; LIMITATION; AFFIDAVIT
When the owner of a property receives notice of a foreclosure sale pending on the property, the owner, if eligible according to a set of prescribed criteria, may request a postponement of the sale for a minimum of 60 days. The trustee must agree to the postponement during which the owner shall have the opportunity to renegotiate the terms of the loan. The trustee must assist in providing information and facilitating meetings between the owner and the lender. Self-repeals on July 1, 2012. Severability clause.

Comment: This bill will be opposed if it starts to move forward and is not likely to pass.

(Bill information provided by Jane Myrick of Security Title Agency.  Commentary provided by Christopher Perry, Esq., Perry & Shapiro)