questions & answers

Question: I have 2 investment homes in AZ and my primary home in CA where I live. Short sale is not an option for me b/c I don't qualify because I have assets. My question is if I foreclose on the 2 investment homes will the lenders put liens on my primary home that has about $200k in equity? Or do I just have poor credit for 7 years?

Answer: Arizona is a non-recourse state. Arizona's anti-deficiency statutes are found here: A.R.S. § 33-729(A) (judicial foreclosures), and A.R.S. § 33-814(G) (trustee's sales). While there are several factors that come into play and you cannot get a complete picture or accurate answer without examining all of them, in general, a property that is a single-family residence on 2.5 acres or less that is used as a single-family/two-family residence only (and not necessarily by you) and where the obligation on the property is a purchase money obligation (loan used to purchase the property) may be subject to anti-deficiency protection in the case of a foreclosure. Be wary of short sales. You may not have protection there.