Arizona lawmakers vote to start over on loan issue

AP News
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Posted: Nov 24, 2009 11:09 AM

Arizona legislators have voted to repeal previous changes to a law protecting homeowners from post-foreclosure lawsuits.

A bill is now going to Gov. Jan Brewer after the final legislative vote on Monday.

Lawmakers last summer narrowed a law that barred lenders from suing homeowners for mortgage amounts not covered by foreclosure sale proceeds.

Bankers claimed there were abuses by borrowers walking away from loans. But the Legislature then repealed the changes when real estate agents complained about possible effects on home sales.

A new bill was prepared to restore the old protection except for new loans involving homes built for resale.

But legislators decided to just repeal all previous changes for now, so they have time to sort out the issue.