Important Arizona Legislation Monitored

Two Bills of importance have been introduced in Arizona and it is important to be aware of them. Christopher Perry, Esq., of Perry & Shapiro, provides an update:

HB2626:

• SB1137 comes to Arizona. Prior to foreclosing on a first deed of trust on property which is the borrower’s principal residence, “the lender must attempt to contact the borrower to explore options to avoid foreclosure at least thirty days before the note [of trustee’s sale] is recorded”. The trustee shall notify the borrower in writing of the lender’s obligation. The trustee AND the most senior management person in this state who is employed by the lender must certify in a written document that they complied with this section.
  
  
• Servicers are exempt if a mortgage loan servicer has implemented a comprehensive loan modification program which meets the requirements of this exception. The requirements are almost exactly like HAMP, though it does require principal reduction. The servicer has to apply to the Superintendent of the Department of Financial Institutions for an order exempting loans from the 30 day notice provision above. The exemption process takes up 2 of the 3 pages of the bill.

Read a summary of the bill provided by Arizona House of Representatives

Read the bill text

HB2321:

• Beneficiaries of deeds of trust are additional parties that a city or town can order to clean up properties or abate dilapidated structures. Does not address how a beneficiary can trespass to do so in an occupied property situation.
  
  
• For residential real property, a Trustee is required to deliver a Notice of Pending Foreclosure to the city, town or county in which the property is located. The power of sale can not be exercised prior to delivery of the Notice. On expiration of ninety days after delivery of the notice, the trustee “may proceed with a notice of sale on the trust property. This seems to add a 90 day period prior to recording of the notice of sale. I am not sure this was the intention of the language.
  
  
• Once a notice of pending foreclosure is delivered, the city, town or county may inspect the exterior of the property on its own motion, and send demands to the beneficiary to clean up or abate the issue. The beneficiary also becomes liable for any charges, costs or assessments. “the Trustee shall pay all assessments levied against the trust property, and then only after recordation of a release of the assessment lien, the trustee may proceed with a notice of sale [again a vague reference which is not clear whether a trustee has to wait to record the Notice of Trustee’s Sale after this date, or simply to enforce a prior recorded NOTS].
  
  
• If no demand is sent to the beneficiary within 90 days after receiving the Notice of Pending Foreclosure, they have waived its authority to order clean up or abatement of the condition, and [once again the vague term] the beneficiary may proceed with a notice of sale.

Read the bill text

UTA will continue to monitor these bills.