Arizona Enacts Legislation Requiring Lenders to Contact Certain Borrowers to Discuss Foreclosure Avoidance

On May 11, Arizona Governor Janice Brewer signed into law H.B. 2626, a bill requiring a lender to attempt to contact any borrower whose mortgage is secured by the borrower’s principal residence to discuss foreclosure avoidance options at least 30 days before the recording of a notice of trustee’s sale. The requirement applies only to those properties with a first deed of trust recorded between January 1, 2003 and December 31, 2008. Loans made, purchased, or serviced by a state or local public housing agency or authority, loans which are collateral for securities purchased by such agencies or authorities, certain de minimum lenders, as well as lenders that are in compliance with the U.S. Department of Treasury Home Affordable Modification Program, are exempt from the requirement. The bill becomes effective July 28, 2010.