Arizona State Senate passed a bill this month that would “require lenders to prove they have the right to foreclose by providing a complete list of any previous owners of the mortgage.” – Bloomberg. There are several other states proposing similar legislation.
While it is important that lenders take great care of important information and documentation when originating a new loan, limiting the lenders ability to foreclose will have dire consequences on the consumer. Impeding a buy medicine lenders ability to foreclose on a property because the borrower is unwilling or unable to pay their mortgage, will increase costs for all borrowers, and increase closing timelines. Banks don’t lose, they simply pass losses to the consumer.