Phoenix AZ Homes and Condos

 Arizona anti-deficiency laws limit the homeowners liability in the event of loan default to the amount the lender can recover at at trustee sale or judicial sale providing the real property is 1) on a 2.5 acre or smaller lot, 2) restricted to and utilized for a single-family or dual- family dwelling and the 3) proceeds of the purchase loan (or a subsequent refinance loan) used to pay all or part of the purchase price of the property (better that all of it was).  However, some lenders are forcing sellers to take back a personal note in favor of the lender as an inducement for the lender to cooperate in a short sale.

J. Robert Eckley, a prominent Arizona real estate and banking attorney, argues in Counselor’s Corner – Unlawful Acts of Banksthat some banks ignore the Arizona anti-deficiency protection during their negotiations with the seller, who is requesting the bank accept less than the balance owed on the loan and release the lien so the home can be sold in a “short sale”.  Some sellers have refused to accept these terms and let their Phoenix property to be foreclosed to avoid any additional financial obligations. Other sellers, who were not made aware of the limitations of the bank to request a personal note, agreed  to accept a personal note for all or a portion of the shortfall in the amount the lender received at the time of the short sale closing.

Sellers with limited assets and income at the time of the short sale have been told they may be subject to a deficiency judgment lien for a period of six years from the date of the Phoenix short sale or the banks may opt to sell off the right to recover against the defaulted loan to collection agencies. We’ll have to stay tuned for Mr. Eckley’s next addition of Counselor’s Corner to learn more about your rights and protections under the law.

My area of service and expertise is the Phoenix southeast valley including Chandler homes AZ, Mesa homes AZ, Queen Creek, Tempe and Gilbert AZ homes for sale. If you find you are unable to make your house payments or won’t be able to in the future, call me. I will send you the Arizona Seller Short Sale Advisory and Disclosure and recommend local attorneys who know Arizona law to explain your options and liabilities. If a Chandler, Gilbert, Mesa or Queen Creek short sale is your best option, I will list, market and get it sold for you so you can get on with your life and build for the future.

Sam Elam, Associate Broker with Prudential Arizona Properties, 480-213-1799