Comments on: SB 1271 Arizona Anti Deficiency Law Repealed!!!

By: Lisa

Lisa — Wed, 05 May 2010 19:52:08 +0000

Great information! Just wondering if this information is still currently valid for Arizona. We are currently in the process of completing a short sale on an investment property that we own and want to make sure that the lender (Chase) cannot come after us for the deficiency amount, which will be around $58000. The home is less than 2.5 acres, was used a single family home and did have tenants, until last year when we put it up for sale. Do we need to first get an express written waiver of release from the bank regarding the deficiency before we proceed with the short sale? Thanks for your help!

By: Sean Bonini

Sean Bonini — Thu, 08 Apr 2010 17:14:04 +0000

In most cases the 100k deficiency on the first is safe but the HELOC you may be personally liable for. This is why many people instead go the short sale route so that we can negotiate that HELOC amount down.

By: Eric Bradford

Eric Bradford — Thu, 08 Apr 2010 15:58:34 +0000

So, if I want to let my home go due to owing around 100,000 more than it is now worth, my lender cannot go after me for any money? What about my 26,000 heloc? Thanks.

By: Barry Hart

Barry Hart — Wed, 30 Dec 2009 21:00:36 +0000

To be clear on my above post, I am obviously referring to a non-owner occupied property such as a rental etc. or a parcel of land or 2nd home that you intended to move into etc upon the sale of your primary home.

By: Barry Hart

Barry Hart — Wed, 30 Dec 2009 20:57:56 +0000

If they do make a deficiency claim against you in a short sale context, most lenders will take the position that because they are basing that claim on the promissory note you signed, they will have 6 years within which to sue you. If anyone is aware of any different time period, I’d sure like to be made aware of it.

By: Renee

Renee — Wed, 18 Nov 2009 23:44:53 +0000

What about those of us who are in VA fixed-rate mortgages? My understanding is that they can still go after us forever to collect on a deficiency judgment, overriding state law.

By: Sean Bonini

Sean Bonini — Thu, 08 Oct 2009 20:11:26 +0000

Yes, it is usually best to have some sort of clause put in there. You also need to make sure that when you get the approval letter that it states it there as well.

By: Wendy

Wendy — Thu, 08 Oct 2009 18:18:11 +0000

Sean:
I am currently pursuing a short sale on an investment property. Do I need to make sure I get a “non-deficiency clause” included in the short sale deal? I’ve been told that the non-deficiency statute applies specifically to foreclosures, not short sales. What is your take?

By: john fleming

john fleming — Fri, 18 Sep 2009 03:43:00 +0000

Hello Sean,
My 1st is owned by National City, plus 2 helocs with National city(2nd position) and chase(3rd position). I’m trying a loan mod on the first, but National City say the investor(s) who own it, are not doing loan mods, and if they were my loan would have to be fully amortirized, and payments more than i’m paying(or cannot afford to pay) now. Question, what will happen to the helocs should i short sale or get foreclosed on ? Of course i could not get National city to listen to a loan remod until i was delinquent, which means now my credit is badly damaged and i cannot qualify for a new loan.

By: Scott Gill

Scott Gill — Thu, 17 Sep 2009 19:09:43 +0000

You mention that lenders cannot pursue deficiency on “Purchase Money” mortgages. In late 2004 we purchased an AZ sfr home as an investment through a 1031 exchange, all cash, to facilitate the exchange time table requirements. After we closed, we pulled out 80% of the equity on a first mortgage fixed rate non-owner refi. Unfotunately, this property is now underwater and we’re considering a short sale. The question is, would the anti-difficiency provison apply to this situations? If not, why not? Thank you.