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Controversial Arizona Foreclosure Bill Officially Reversed

State Senate bill 1271 -- which would have drastically changed Arizona's foreclosure law -- was reversed when Governor Jan Brewer signed the majority of the budget.

 

The law would have made it more difficult to qualify for protections that often prevent homeowners from going bankrupt in the event of foreclosures.

Those who would have been affected include people with more than one house -- people who bought a home for their parents or kids, for example. Also, people lacking "certificates of occupancy" -- something that's supposed to be issued with a new house but that many cities (such as Mesa) don't even use.

"We're happy that the mistake the banking lobby brought to the Legislature has been reversed," said Tom Farley, spokesman for the Arizona Association of Realtors. "Now we have to sit down and figure out how best to address lending practices into the future."

Brewer took the budget action Friday: the law was supposed to take effect September 31.

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