Arizona Residential Mortgage Brokers: Potential Additional Liability Exposure on the Horizon

by Bob Henry

Arizona Senate Bill 1026, introduced by Senator Ableser, proposes some significant changes to the law governing Arizona’s residential mortgage brokers that could expand their potential liability arising out of their day-to-day business dealings.

The bill proposes amendments to A.R.S. § 6-909, which currently sets forth various “prohibited acts” for those who are engaged in the business of making or negotiating “mortgage loans” in the State of Arizona. If enacted, S.B. 1026 would impose upon mortgage brokers an independent duty to verify a loan applicant’s ability to repay a loan, which historically has been the obligation (from a business perspective) of the institution actually providing the loan to the borrower, and not a statutory obligation or duty of the person or institution helping a borrower secure the loan.… Read More »

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