Category — Arizona Anti Deficiency Law – SB 1271

The Arizona State House & Senate have been proactive in helping the local real estate economy. To date 14 bills have been introduced relating to foreclosures, short sales, anti-deficiency laws, and other real estate issues. Here’s a list:

HB 2442, Reverse mortgages; regulations — Approved by House Banking & Insurance (B&I) Committee
HB 2270, Homeowner protection — Referred to House Commerce and B&I Committees
HB 2309, Foreclosure consultants — Awaiting Committee of the Whole (COW) floor action
HB 2479, Foreclosure deeds — Approved by House Government Committee
HB 2511, Municipal taxes — Approved by House Ways & Means Committee
HB 2554, Foreclosure consultants — Referred to House Commerce Committee
HN 2626, Deeds of trust — Approved by House Commerce Committee
HB 2728, Home equity purchasers — Referred to House Commerce and B&I Committees
HB 2739, Foreclosures, mandatory mediation — Referred to House Commerce & Government Committees
HB 2740, Foreclosure, right to sell — Referred to House B&I Committee
HB 2766, Tenant notice, foreclosure — Approved by House Commerce Committee
SB 1130, Foreclosure consultants — Awaiting Senate COW floor action
SB 1302, Real estate transfers — Awaiting Senate COW floor action
SB 1333, Exchange facilitators regulation — Referred to Senate Commerce

I did NOT include SB 1271 in there (The Arizona Anti-Deficiency Law) as it was repealed back in September, 2009. Thanks again, Governor Brewer!!

Today the anti-deficiency fix bill SB 1004 was passed unanimously by the House of Representatives.

Basically this fix returns the statutes to the way they have been since 1971 and before SB 1271, essentially maintaining that Arizona is a deed of trust state and still an anti-deficiency state.

There are some remaining issues, specifically those issues that deal with speculative building, that remain to be addressed and will be at an upcoming special session.

The Arizona Bankers Association has filed a petition for a special session as they are declaring the repeal of SB 1271 “unconstitutional”.

We knew they would do something however I can’t believe they dug up something this ridiculous…wait a minute, yes I can.

These are the same people that ruled that the entire city of Mesa should be pursued for a deficiency if they were unable to pay their mortgage. (Mesa does not issue Certificates of Occupancy which were required under SB 1271)

Which, speaking of SB 1271 again, WAS REPEALED!!!

SB 1271 was a terribly written, poorly executed attempt to screw over the Arizona homeowner and it didn’t work!! So the Bankers Association has instead decided to try and find a legal loophole as it’s the only way they can get it revisited since it didn’t have any ground to stand on in the first place!

We’ll keep you updated as to the status of this petition and how it affects the Arizona homeowner, its effect on foreclosures and on Arizona short sales.

I have received a few requests for a copy of the signed bill HB 2008 which includes the repeal of the ridiculous Arizona anti-deficiency law SB 1271.

If you’d like a copy just send me an email at Sean@AzHomeHelp.com and I will happily send  it to you.   It’s a PDF about 4 mb large.

I spoke to an attorney last week who specializes in helping homeowners battle the banks after a foreclosure.  Here is a paraphrase of what he told me regarding lawsuits:

“Banks are heavily pursuing borrowers who foreclose on their properties and either A) don’t qualify for anti-deficiency protection; or B) aren’t safe because the debt was a HELOC or cash-out refi and was a jr or second lien.”

“In the event of a short sale, we are not at this time seeing banks pursue individuals who short sold their home, even if the bank still reserves the right to pursue any deficiency due to language in the approval letter.”

So in other words, it seems that banks are pursuing people who foreclose and still owe money in an attempt to minimize their losses but they are NOT at this time as actively pursuing people who short sell.

Every short sale and foreclosure situation is different but this is good news to hear!   Hopefully this trend will continue into the future as I feel we are going to be inundated with short sales for  the next few years.