Personal liability in Arizona Foreclosure
A borrower is considered personally liable for a loan deficiency when the
unpaid loan balance is greater than the value of the property. Arizona has statutory exceptions to protect borrowers from liability; these are commonly referred to as anti-deficiency statutes.
A borrower is not considered personally liable for an Arizona home loan if the property is:
- Two and one half acres in size or less and
- Limited to and utilized as a one or two family dwelling.
If the lender were to choose foreclosure by judicial action a third element must be met:
- The loan must be “purchase money”; the money borrowed was used to pay for all or part of the property.
All of these factors will be reviewed when facing foreclosure in Arizona.