From real estate sales contracts to home warranties, arbitration clauses are more and more often seen as a scourge against homeowners' rights and an all-out consumer uprising appears to be emerging.

• Public Citizen recently asked 12 states to investigate insurers' and home warranty companies' use of a questionable arbitration firm headed by a disbarred attorney. Eleven of those states ban arbitration clauses from insurance contracts.

• A coalition of consumer groups from AARP to the NAACP says Citigroup's failure to stop requiring mandatory arbitration in its subprime loans puts it out of step with Freddie Mac and Fannie Mae and other large lenders.

• Earlier this year, looking to avoid controversy, Fannie Mae and Freddie Mac backed away from investing in mortgages with mandatory arbitration provisions.

The arbitration clauses are found more and more often in home loan contracts, home improvement contracts, new-home contracts and many more real estate transaction contracts.

"From mortgage loans, to mobile homes to managed care, mandatory arbitration has become an ever-present and unfortunate fact of life for American consumers," said Travis Plunkett, legislative director of Consumer Federation of America.

One type of alternative dispute resolution, arbitration is having a dispute settled by one or more impartial persons for a final and binding decision outside the legal system. Contractual provisions determine issues open for arbitration, the scope of any relief to be awarded, as well as the procedural aspects of the process, according to the American Arbitration Association.

Arbitration does help reduce the legal case backlog and it can save money over the cost of a legal trial, but consumer advocates are most chagrined by contracts that come with mandatory arbitration clauses. That's because such clauses undermine the constitutional right to use the legal system to settle disputes.

"If predatory terms like discriminatory prepayment penalties and unnecessary fees are the bricks of the predatory lender's house, mandatory arbitration is the cement that holds it together. We ask that Citigroup show real courage as it has done in the past in standing up for the rights of African-Americans and all borrowers in demanding this practice be stopped," said Hilary Shelton, director of the Washington Bureau of the NAACP.

Public Citizen's broadside includes criticism of contracts that call for the lender, builder, home warranty insurer or other entity writing the contract to also select the arbitrator.

"Mandatory arbitration is already skewed against consumers even without the involvement of dishonest persons or illegal operations," said Jackson Williams, legislative counsel for Public Citizen.

"When arbitrators are selected by the business defending the lawsuit, the arbitrator's bias will be to rule in the business's favor or award less than full damages," he added.

The Responsible Lending coalition also says arbitration can:

• Impose high costs to the consumer, in terms of filing fees and the additional expense of arbitration proceedings.

• Introduce inexperienced arbitrators to rule on complicated issues without the right to appeal.

• Place a secretive non-public shroud over the proceedings to prevent exposure of unfair business practices to the public at large.

"Mandatory arbitration clauses undermine hard won consumer protections by barring homeowners from obtaining judicial scrutiny of their loans," said Chris Hansen, associate executive director of AARP.