Keith Loria Oct. 18, 2010, 4:41pm
PHOENIX (Legal Newsline) - Arizona Attorney General Terry Goddard announced on Friday that he is urging the state Legislature to enact a Borrowers' Bill of Rights in an effort to help homeowners from being deceived by unscrupulous mortgage servicers.
Under the proposed Bill of Rights, borrowers would receive timely and accurate responses to good-faith borrower inquiries, learn clear information on how to avoid foreclosures and not have their homes foreclosed during loan modification negotiations.
Goddard is running for governor.
"The foreclosure abuses we have seen have hurt Arizona homeowners and our economy," Goddard said.
"One-sided mortgage contracts and abusive foreclosure practices are unfair to consumers. They tip the balance of power decidedly and inappropriately in favor of lenders and against homeowners. It is time to balance the scales. Borrowers should have rights that can be enforced."
The Borrowers' Bill of Rights also calls for loss mitigation negotiations whenever possible, and makes any violation of its provisions an unlawful practice subject to prosecution by the attorney general under Arizona's Consumer Fraud Act.
If a foreclosure becomes necessary, it would have to be based on accurate documents and verified by someone with personal knowledge of the information.
The Dodd Frank Act, signed on July 21, 2010, expanded the state's ability to enact consumer protection laws, including this proposed legislation, Goddard says.
"It has become clear we need enforcement power to ensure that servicers live up to their commitment to their customers," Goddard said. "The bill I am proposing today would give borrowers these important rights."
Goddard's proposal would cover all companies that service mortgage loans in Arizona and ensure 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.
Goddard has received hundreds of complaints from home owners over abusive practices of their mortgage loan servicers. He is one of 12 attorneys general on the executive committee of the Multi-State Home Foreclosure Investigation that is looking at unlawful robo-signing by loan servicers.
"Questionable document signing practices, however, represent only one of many problems that borrowers are facing," Goddard said.