Anti-deficiency measures in the state of Arizona, much like many other states across the U.S., have been implemented in light of an ongoing foreclosure crisis facing homeowners. Currently, the anti-deficiency laws applicable to the state of Arizona are codified in the Arizona Revised Statues Sections 33-814.G and the Section 33-729.A. These two statutes define deficiency judgments Arizona laws, specifically for primary homeowners.
What Arizona Anti-Deficiency Laws Cover
Under the existing anti-deficiency laws in Arizona, mortgage holders are exempt from deficiency judgments following foreclosure, if the mortgage debt was secured by a primary residence of a homeowner, for use as single one family or two family residence. The funds from the mortgage loan must have been used to purchase a given piece of real estate less than two and a half acres.
When Deficiency Judgments May Occur in Arizona
Concerning home mortgages or deed of trust agreements, a homeowner may be subject to deficiency judgment on a given property in the following scenarios:
- If the residence and mortgage loan secured by the residence were not used as a primary residence of a single family, but rather, as a commercial real estate property or for-profit residential real estate venture, a debtor may be liable for deficiency judgment.
- If the residence was larger than the allotted two and a half acres prescribed under Arizona statutes governing anti-deficiency laws, the homeowner may be subject to a deficiency lien.
- If the debtor engaged in a short sale or deed in lieu of foreclosure deal, rather than actually proceeding with a judicial or non-judicial foreclosure proceeding, he or she may be liable for a deficiency judgment.
- If a debtor has secured a given home to a second or subsequent mortgage, they may be liable for a deficiency judgment in the state of Arizona.
Getting Legal Help with Arizona Deficiency Judgment Laws
Every potential foreclosure or foreclosure alternative will present highly individual and unique circumstances that can either benefit or damage a given homeowner. As a homeowner facing foreclosure, the only realistic method of ascertaining what one’s best options are, in light of all applicable Arizona foreclosure and deficiency laws, as well as the individual and highly case-specific nature of each home loan in distress, a homeowner should consult with an Arizona foreclosure lawyer as soon as possible. The highly case-specific nature of every debtor’s situation and their current home loan will present a different outcome for every case, and in turn, a homeowner must determine how any given action may influence the eventual fallout from a given foreclosure proceeding or foreclosure prevention action.
