The banks aren’t a bunch of ignorant hillbillies that needed government protection from those big bad Arizona real estate investors.
The banks knew full well what the rules of the game were when they made those loans to Arizona real estate investors, and Arizona vacation and second-home buyers. For the banks to try and change the rules in the middle of the game is despicable.
Supporters of the legislation hailed it as a valuable tool to help lending institutions recover losses caused by investors who determined that allowing their homes to be foreclosed upon was cheaper and easier than selling during depressed market conditions.
However, after the bill was signed, the Arizona Association of Realtors successfully pressed for repeal.
Tom Farley, the group’s CEO and lobbyist, argued the bill violated constitutional protections that prohibit interference with agreements between private parties, and unfairly applied to owners of second or vacation homes, as well as homes purchased for family members.
Farley said he was “confused and disgusted” that the banking industry, which, has already benefited from federal Troubled Asset Relief Program loans, would file a lawsuit that would cost the state money to defend itself.
Now, if the banks wanted to make such legislation apply to all NEW Arizona mortgages, well, that’s fair. But to make it apply to all previous mortgages is dead wrong and is an abuse of the banks’ economic and political power.
P.S. Kudos to Tom Farley and the Arizona Association of Realtors for getting the Governor and Legislature to fix the mess.