AZ HB2270

Prohibits mortgage brokers from making residential mortgage loans without first verifying the borrower's reasonable ability to repay principal, interest, taxes, insurance, and mortgage insurance premiums based on fully indexed rates and reliable financial documentation.

Prohibits "churning," defined as knowingly making a residential mortgage loan that does not provide a reasonable, tangible net benefit to the borrower considering all circumstances, terms, costs, and the borrower's situation.

Prohibits mortgage brokers from intentionally making loans designed not to be repaid with the intent of obtaining the property through foreclosure.

Prohibits mortgage brokers from steering borrowers toward lower investment grade loans when they qualify for higher investment grade loans with lower interest rates or discount points, unless the borrower is informed and provides written consent.

Prohibits mortgage brokers from charging fees for services not provided, misrepresenting amounts paid to third parties, or compensating appraisers in ways that influence their independent judgment on property value.