Personal Liability in Arizona Foreclosure

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:

  1. Two and one half acres in size or less and
  2. 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:

  1. 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.