STATE CAPITOL, PHOENIX – Rep. Debbie McCune Davis, D-Phoenix (District 14), has introduced a Borrowers’ Bill of Rights that holds abusive mortgage servicers accountable and guarantees the rights of homeowners by making certain unscrupulous servicing practices unlawful.
House Bill 2383 requires all mortgage servicers to engage in loss mitigation techniques in an effort to avoid unscrupulous servicing practices and to ensure the rights of homeowners under the Arizona Consumer Fraud Act.
“The foreclosure abuses we have seen have hurt Arizona homeowners and our economy,” McCune Davis said. “Now more than ever, we need to hold these abusive mortgage servicers accountable to We the People. Arizona has the opportunity to fix a broken system, get our economy moving again and protect essential services for middle class homeowners.”
Hundreds of Arizona borrowers have filed complaints with the Arizona Attorney General's Office concerning abusive practices of their mortgage loan servicers. Despite federal efforts to encourage loan servicers to modify loans of borrowers at risk for foreclosure, consumers continue to complain of lenders failing to respond to their requests, misrepresenting the length of time the loan modification process will take and pursuing foreclosure while a loan modification is pending.
Under the Bill of Rights, borrowers would have the right to:
• Receive timely and accurate responses to good-faith borrower inquiries
• Receive clear information on how to avoid foreclosure• Pursue loss mitigation or loan modification negotiations whenever possible
• Not have their home foreclosed during loan modification negotiations
• If and when foreclosure becomes necessary, to have such foreclosure based on accurate documents, verified by someone with personal knowledge of the information contained therein.
The Borrowers’ Bill of Rights would also make any violation of its provisions an unlawful practice subject to investigation and prosecution by the Attorney General under Arizona's Consumer Fraud Act.
McCune Davis’s bill would cover all companies that service mortgage loans in Arizona, from national banks to small mortgage companies. This ensures that every person with a mortgage in Arizona can expect the standards set forth in the Borrowers’ Bill of Rights from whatever company services their loan.
“One-sided mortgage contracts and abusive foreclosure practices are unfair to consumers and they need to be held accountable, especially during one of the worst foreclosure crises we have seen in our lifetime,” McCune Davis said. “It is time to balance the scales. Borrowers should have rights that can be enforced.”
Cosponsors of the bill include House Minority Leader Chad Campbell, Reps. Hobbs, Patterson, Alston, Hale, Catherine Miranda, Tovar.