The war between lenders and upside down borrowers is creating a great deal of confusion and controversy around the Arizona short sale deficiency law. You may find similar information under the terms “Arizona Foreclosure Law” or “Arizona Anti-Deficiency Law” so be aware that these items are all basically related to the same idea… The idea of who is legally responsible for the balance owed on the loan when a home is sold as a short sale in Arizona.
What this means is that when you short sell your home, and the lender agrees to accept less than what is owed on the loan that there could be consequences in which the lender or bank chooses to come after you for the balance of the loan. So if you have a loan balance of 200k and your short sell your home for 150k, you may be held responsible for the balance of the loan or 50k in this case.
This has created a panic among home owners who are seeking relief of their burdensome debt on an property whose price is less than the amount owed and the lender who is left with the choice of whether or not to hold a home owner responsible for the balance or “deficiency” on that loan.
The burning question then becomes: “If I want to short sell my home, will I fall into the category of people who will still owe the bank the balance of the loan?” And the answer is usually yes and no.
The simple truth is that there are no hard fast rules when it comes to whether or not you will be responsible for the deficiency on your debt. The reason is simple… It all depends on your specific situation. In Arizona, the only way to determine your specific outcome is to sit down with a professional and get some questions answered. You should do this sooner rather than later as time matters, and it’s not on your side. Especially, if you want to maintain your options… And, even more so if you are already in default on your loan or facing foreclosure currently.
In the world of Arizona short sale deficiency, there are a couple laws that have been written to provide relief to the you as a debtor in the form of the Arizona Anti-Deficiency Statutes or Anti-Deficiency Legislation in some circles. These laws provide stipulations that determine who qualifies for protection from deficiency proceedings. These statutes can be found in the Arizona Revised Statutes (find these online by searching Google), Sections 33-814.G and 33-729.A, and while these statutes may read a bit strangely, as they are written in lawyer speak, you can get a reasonable idea of what you can expect on Arizona short sale deficiency by studying them for a few minutes.
On its face, the anti-deficiency laws do apply when a purchase money lender (meaning the lender who provided the purchase cash for you home) chooses to begin a foreclosure on an Arizona property. So, they can come after you for the balance; however, there are many stipulations, which when met by you, allow you the home owner to avoid being subject to future deficiency payments.
The real trick is to know which criteria you must meet to completely close the book on your debt obligation. That is where an attorney is useful. If however you are not ready to fork over the 350 dollars per hour, you can contact your Arizona short sale expert for anecdotal information and get a reasonable idea of your chances at avoiding Arizona short sale deficiency payments.
You must understand that there is no absolute shield from being sued by your lender for your deficiency amount. The best and most certain course of action is to be sure and have your short sale expert and your attorney go through the paperwork from your lender looking for a “personal release”. They will know what to look for, but you must be careful and take the proper time to go through your documents. Do not be hasty. Be sure that personal release from your lender is part of your short sale agreement. That is the only thing that will guarantee your future is “deficiency payment” free!
You can absolutely help yourself best by being proactive. This will eliminate your fear little by little as you begin to delve into the process and get the facts.