Arizona’s Anti-Deficiency Statutes to Remain Unchanged

September 14th, 2009 at 12:53 pm

 

Arizona’s Anti-Deficiency Statutes to Remain Unchanged

 

As a result of legislation that was signed by Governor Jan Brewer last week, the Arizona Anti-Deficiency statutes will remain unchanged.

 

Earlier this summer, the Governor signed SB1271, which effectively changed the rules on how and when lenders could pursue a borrower after a default of a mortgage loan. The statutes have been in place in Arizona for decades, and they protect a residential homeowner from being sued by a lender after a default, such as a foreclosure. With those statutes in place, after a lender foreclosed against a homeowner, in most cases, they were unable to pursue the homeowner for the deficiency. SB 1271 would have changed that, and many of the provisions of the bill were ambiguous as to the definition of a resident or occupant. This ambiguity could have thrown thousands of homeowners into a situation whereby they could have faced additional costs after a foreclosure.  Thus, The Arizona Association of Realtors along with many other consumer groups lobbied the Governor and the Arizona Legislature to draft legislation to repeal 1271 before it went into effect on September 30,2009.

 

The Arizona Legislature and the Governor did just that. During a special legislative session this summer, HB 2008 was drafted and approved and Governor Brewer signed the bill last week. HB 2008 repeals SB 1271 and its change to the anti-deficiency statutes; thus, the statutes remain as they were.