A Funny Thing Happened on the Way to the AZ House of Representatives… After passing the Senate 28-2… S.B. 1259 Completely Disappeared

Arizona State Senator Michele Reagan, was first elected to serve in the Arizona House of Representatives in 2002.  In 2010, she was elected to the Arizona State Senate.  She is Vice-Chairman of the Banking and Insurance Committee, and Chairman of the Committee on Economic Development and Jobs Creation.

Well, as you might remember from the article I posted on February 23rd of this year, she and her husband were sued by their servicer, Texas-based Colonial Savings FA, when they sent the bank a letter last July stating that they were planning to rescind their loan due to violations of the Truth in Lending Act or TILA.

Apparently, Senator Reagan found herself having a dickens of a time finding out who exactly owned her note, and she wasn’t at all happy about it.  So, in response, and working with Arizona attorney, Beth Findsen, she sponsored Senate Bill 1259.

Michele Reagan, in a telephone interview, said:

“If you foreclose on somebody you should have to tell them who owns the property.  People have the right in this country to face their accusers.”

And, according to Findsen:

“It makes Michele mad that the bank servicers will not disclose to a borrower the true noteholders,” Findsen said. “She was taken aback that such basic information was not readily available.”

When I learned that last February S.B. 1259 passed the Arizona State Senate… a Republican dominated senate, by the way… by an overwhelming 28-2… well… I got kind of excited about the prospects for the bill’s ultimate passage by the Arizona House of Representatives because were it to pass and then be signed by the governor, servicers and lenders would actually have to follow the state’s laws related to chain of title, and therefore would be bringing fraudulent documents into court… at the very least… far less often.

And presumably the servicers that haven’t followed the laws and therefore that have broken the chain of title rules, would now have a powerful incentive to modify loans, instead of perpetuating illegal foreclosures.

Of course, it came as no surprise that Arizona Bankers Association CEO, Paul Hickman was quick to issue the banking industry’s standard threatening warning, issued whenever anything might change existing rules:

“If Arizona passes this, it will be the only state in the union that will require a production of chain of title. States that pass these types of laws will be riskier environments to lend in and more difficult environments to get a loan in.”

But that’s nothing more than just the industry’s standard scary bedtime story, nothing to get too excited about… at least that’s what I thought at the time.

So, I posted my article on Senator Reagan’s S.B. 1259 this past February and waiting anxiously to hear about its passage by the House.  The governor, smart money was already saying, would sign the bill upon its passage.  This was going to be good… don’t you just love Arizona, was all I could think to myself.

It was perhaps a little over a month later when I found myself packing my suitcase, about to leave for the greater Phoenix area on my second annual pilgrimage to watch Major League Baseball’s Cactus League during Spring Training.

I called an Arizona foreclosure defense attorney, Don Loeb, who lives in Phoenix, and who had suggested that we meet for dinner during my stay in the Valley of the Sun, and while I had him on the phone, I asked him about the status of Senator Reagan’s bill, as I had been unable to find anything about its status online.  In fact, when I had searched for information on-line, S.B. 1259 seemed to be about something about firefighters… I was sure I was doing something wrong.

What I heard Don say, however, made no sense to me whatsoever and it simply wasn’t sinking in for the first minute or two… Don said S.B. 1259 was gone, replaced by something having to do with firefighting… he said I needed to speak with Beth Findsen to get the details.

I hung up feeling kind of numb, to be honest.  How could such a thing have happened?  I went back to Google to search for anything describing what had transpired… to absolutely no avail.  There was not a single news story on S.B. 1259’s demise… nothing written by a journalist… nothing even on the state senate’s Website.

Beth Findsen is a foreclosure defense and consumer lawyer whose been a reader of mine for some time now, and I like her a great deal.  Her husband is an ex-Wall Street type… not a banker per se, but more an financial advisor kind of guy I think.

Beth answered her cell phone when I called, having arrived in Phoenix the night before… and she confirmed that although she couldn’t comment on every aspect of Michelle Reagan’s bill as a result of attorney-client privilege issues, she could confirm my that it had vanished into thin air.  It had happened over the weekend just prior to it landing in the House for the vote.

I asked Beth to meet me with Don Loeb and I for drinks and appetizers at the Flemming’s restaurant in Scottsdale and she said she’d absolutely try.  She and her husband were already there when I walked into the bar and sat down about an hour later.  It was what it looked like… and all she could really say was that she had been told that compromises were required at times.

Let’s be very clear here… this is not about the foreclosure crisis… even though it also is.

This is not about chain of title issues, even though it is as well.  This is about our country… our republic… our representative democracy… the land of opportunity… where there are no castes from which one is relegated to spend a lifetime.  Where corruption, although sporadically exposed… is never abided, respected, or in any way condoned.  This is about the very nature of our great society.

This proposed piece of legislation, which would have required banks and servicers to follow what are for the most part existing laws governing foreclosures and the transfer of property rights.  Nothing particularly heinous… certainly nothing that makes me fear for the survival of free market capitalism.

But it was also something the bankers and servicers… and they’re really the same for our purposes… could not tolerate… and would not allow… period.  To hell with out political process and system of government.

So, using their immense power to drive our democracy, they did what ever they had to do to… so that they could maintain the status quo because… well, because that’s what they wanted and decided would be best for everyone.

Had they wanted our opinions, they would have given them to us.

And they not only possess the power to make federal bills sing in the key of Wall Street… they are equally adept at reaching out to Arizona over a weekend and swatting away a bill proposed by an elected official without so much as a classified ad to herald its death… even though it had just passed the senate, 28-2.  Perhaps next time, we should make a mental note to say “pretty please,” as opposed to just please.

Oh my God, I hope we haven’t gone too far this time and potentially angered our bankers.  That’s a very scary thought, don’t you think?  In fact, I better stop talking about this now.

Mandelman out.


  1. Transmut1 says

    So pathetic, damn the banks, and the bastards that run them.

    Bring back the bill and pass it properly, what a bunch of sissies in Arizona, I will forever respect the battleship, but no longer the state.

    Do whats right for the people, not the bankers, they are bloody vampires!

  2. Flex says

    America, Mandelman is back. I don't know about you, but I sure missed him and his blog. I really enjoy reading his articles. This is a man that lives by the truth and shares everything that is going on about Fraudclosure Gate with us. If you only knew what is going on in the country and in the courts, even if you have legal representation, no only the banks get away by breaking the law, they also get away to kill any bill put out there even by the legislators at the Senate. It kind of makes you wonder, is this the America we used to live in? Is there anybody out there who does not sell out and give in to the banks? Their lobbyists are paying millions of dollars every chance they get to get away with any bill that is written by those who believe in Justice and Freedom in this country.
    I always wonder, how long are going to put up with this Corruption? They get settlements and we get nothing but losing our homes. They get bails out and we get kick out of our homes and under the bus. They get tax breaks and make millions of dollars and get to pay taxes for the rest of our lives and even when we are dead.
    America, what does it takes for you to wake up and learn once and for all that the banksters are not your best friends? When are you going to realize that the banks will take your home even if it is paid for? Why is it that most of you don't want to get it and understand that The Government, the banks, and Wall St. are in this together?
    If you continue living in denial and believing in the government, the banks, and Wall St, soon you will be next, then it will be too late. You had been hearing and seen what is happening to your country for over five years and you had done nothing.
    Many of you still think this is a problem for those deadbeats that could not afford to pay for the money they borrowed it from the banks. How little you know because you were duped just like all of us. We also believed in the Government, the banks, and Wall St. and look what happened to us. What make you think you are any different? I bet you also don't know who the holder of your note is. I bet you never went to the county clerk and ask for a copy of your records. Better yet, I bet you never read your loan documents and you don't even know if you have MERS, Fannie Mae, or Freddie Mac in your Deed of Trust. If you are paying your mortgage to a Servicer, I have a big surprise for you. Just wait until you finish paying your mortgage and ask for the Deed of conveyance, in other words, the Title of your home in your name, just like when you paid off your car, you get the pink slip, the title. What would you do when the servicer tell you they don't have the Deed of conveyance, because they don't know who is the holder of your note. Kaboom!
    What are you going to do about it? Are you going to run to Uncle Sam to help you?
    If you do, you better start running now, because elections are coming this winter and there will not one to run to. If you don't get the drift by now, you better start looking for an Attorney in law, but not just any Attorney, look for an Attorney in Property Law. God Bless You! and God Bless America! The land of the Greed and home of the Shame. No offense, this is just my opinion.

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