What Are Arizona Anti-Deficiency Laws? Arizona Revised Statute §33-729 protects homeowners with a purchase money mortgage from deficiency judgments. To qualify, the property must be less than two and half acres and used as single one-family or single two-family dwelling.
Is Arizona a judicial or nonjudicial state?
In Arizona, most foreclosures proceed via a non-judicial process governed by a deed of trust executed and recorded at the time of purchase. By electing this procedure, the lender may proceed with a trustee’s sale without having to file an action in court.
What is recourse vs non-recourse?
A recourse debt holds the borrower personally liable. A nonrecourse debt (loan) does not allow the lender to pursue anything other than the collateral. For example, if a borrower defaults on a nonrecourse home loan, the bank can only foreclose on the home.
Are there any states that are non recourse for mortgages?
Per the study, these 10 states are generally classified as non-recourse states for residential mortgages based on NCLC data. They are Alaska, Arizona, California, Hawaii, Minnesota, Montana, North Dakota, Oklahoma, Oregon, Washington, and Nevada for mortgages obtained on or after 1 October 2009, according to the report.
What happens in the case of a non recourse loan?
However, in the case of default, the lender only can seize the collateral specified in the loan documents and cannot go after the borrower’s other assets. Few banks offer non-recourse loans, but home mortgages are treated as non-recourse loans in 12 non-recourse states.
Can a state be classified as a non recourse debt?
States can’t easily be categorized as recourse or non-recourse states. An OLR Research report in 2010, as revised in 2011, recognized that almost all states allow for deficiency judgments with many states putting in place conditions for those judgments and the maximum amount lenders can recover from borrowers.
How can I tell if my mortgage is a recourse loan?
However, if you want to know whether your outstanding home mortgage is recourse or non-recourse, start by determining whether you are in a recourse state as listed above.
