Arizona Realtors Look To Reinstate Anti-Deficiency Language

Posted by Orb Staff on July 28, 2009 No Comments
Categories : Mortgage Servicing

a [link=http://www.azleg.gov/legtext/49leg/1r/bills/sb1271s.pdf][u]Senate Bill 1271[/u][/link], which allows lenders to seek deficiency judgments on foreclosures started after Sept. 30, should be amended during the state legislature's special session, argues the Arizona Association of Realtors (AAR). In a letter to Gov. Jan Brewer and state legislators dated July 22, AAR CEO Tom Farley wrote that S.B.1271 will throw owner-lender rights ‘way out of balance.’ The legislation essentially does away with the state's anti-deficiency statute, which has been in effect for almost 40 years. S.B.1271 extends borrower extensions to certain borrowers – namely, those who have used a single one- or two-family dwelling for at least six consecutive months – but Farley says the ultimate result of the current bill language will be "a dramatic increase in foreclosures, litigation [and] falling real estate prices." The AAR argues that the legislation will impede workout agreements between lenders and borrowers. "Until now, banks needed to work with borrowers, otherwise they'd be stuck with a house they'd have to sell," his letter says. "If this bill stays as law, the banks will have an incentive to use Arizona's expedited foreclosure process to collect pennies on the dollar and sue the trustor for the difference." SOURCE: Arizona Association of R

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