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Permalink Reply by Ron Hollingsworth on February 11, 2010 at 4:39pm

Doreen,

What did you find out about this?

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Permalink Reply by Sylvia Finocchiaro on February 22, 2010 at 4:11pm

Hello Doreen,
I believe short sales may not pertain to the anti deficiency laws in Arizona only in a trustee sale or foreclosure. I am not an lawyer nor do I give legal advice. It is my understanding that a homeowner under the anti deficency statue is only protected under a Trustee Sale or foreclosure which prohibits the Lender to go after any deficiencies after a sale. It does not apply to a HELOC or a Second unless they were a part of the purchase money mortgage. A person may not be sued by his or her lender if the property is located on 2.5 acres or less and is a single family residence or duplex on purchase money mortgage.

The statute defines a purchase money mortgage (or deed of trust) as one “given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price.”
You should consult an attorney for advice.
Anytime a Lender does not have "satisfied in full" and releases all and any future defiecencies your client could be at risk. I always tell my clients to have an attorney read the approval letter to make sure they are protected. I also have them sign an addendum stating that they have been told to seek legal advice before signing the approval letter from the lender and releasing me and my broker from any liabilities. It is called CYA! But it is also the best thing for you and your client since we are not lawyers.

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Permalink Reply by Steele V. Propp on February 23, 2010 at 1:34pm

We have seen similar statements from attorneys. Short sales are NOT covered in our state of Minnesota and most of the others from what we are told.

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Permalink Reply by Brigitte Mueller on February 24, 2011 at 11:17am

I agree with Sylvia...

Anti Deficiency laws in Arizona apply under the umbrella of foreclosure, not short sales.  And yes, there are specifics on whey they apply and only an attorney can help advise on this area.

Sylvia Finocchiaro said:

Hello Doreen,
I believe short sales may not pertain to the anti deficiency laws in Arizona only in a trustee sale or foreclosure. I am not an lawyer nor do I give legal advice. It is my understanding that a homeowner under the anti deficency statue is only protected under a Trustee Sale or foreclosure which prohibits the Lender to go after any deficiencies after a sale. It does not apply to a HELOC or a Second unless they were a part of the purchase money mortgage. A person may not be sued by his or her lender if the property is located on 2.5 acres or less and is a single family residence or duplex on purchase money mortgage.

The statute defines a purchase money mortgage (or deed of trust) as one “given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price.”
You should consult an attorney for advice.
Anytime a Lender does not have "satisfied in full" and releases all and any future defiecencies your client could be at risk. I always tell my clients to have an attorney read the approval letter to make sure they are protected. I also have them sign an addendum stating that they have been told to seek legal advice before signing the approval letter from the lender and releasing me and my broker from any liabilities. It is called CYA! But it is also the best thing for you and your client since we are not lawyers.

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