State lawmakers propose foreclosure relief bill

House Democrats want to help Arizona homeowners get back on track when it comes to their home loans.

Monday, lawmakers announced a bill that would help bring relief to homeowners across the state, which is ranked second in foreclosures.

State Democrats say the Foreclosure Rescue for Arizona Act, House Bill 2765, and other foreclosure bills would help prevent fraud and help families, homeowners and renters stay in their homes.

In Yuma County, that could be a lot of homeowners. Since Feb. 8, 18 of the 44 single family dwellings in Yuma County sold are bank owned, or almost 41 percent, said local real estate broker Carol Engler.

Included in the bill are measures such as protection for homeowners who are facing foreclosure from scams and fraud. Lawmakers also want a 60-day relief period to homeowners who are in foreclosure and in danger of losing their home.

Engler said the bill is "long overdue" and "very much needed."

"I know of many sellers right now that have done this and modified the loan and made payments for three months and they still lose their home," Engler said. "It encourages the lender to make more of an effort to arrive at revised loan terms, so this is fabulous."

It would also include a measure to help homeowners subject to foreclosure remain in the homes as renters and require the landlord to allow a tenant at least 30 days to vacate a foreclosed property.

"Because so many of these poor tenants are being evicted when they lost their security deposit," Engler said. "Here they're the ones bearing the brunt of the homeowner's selfishness."

Tenants would get additional help with the bill with a provision that would require maintenance of properties during the foreclosure process.

Engler calls that "absolutely critical."

The bill would also encourage parties involved in foreclosure proceedings to restructure loans to prevent foreclosure and delay a sale for up to one year if the lender fails to negotiate in good faith with the borrower.

Engler said "we see a lot of this," talking about the lender failing to negotiate in good faith with the borrower.

"It's like rubbing salt in their wounds," she said.

It would also create a mandatory foreclosure mediation program supervised by the Arizona Supreme Court and require "equity purchasers" or "foreclosure consultants" to be licensed."

Engler said she encourages everyone seeking foreclosure to be cautious of scams.

"If it sounds too good to be true, it is."

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Stephanie A. Wilken can be reached at swilken@yumasun.com or 539-6857.