questions & answers
Question: We had a house go to foreclosure and the lender ended up selling it. Now the bank of the second mortgage is trying to sue us for the deficiancy. the lot is less than 2.5 acres & house is single family. Can they do this or does this violate ARS title 33?
Answer: If the second mortgage was a purchase money mortgage, Arizona's anti-deficiency statute applies and the lawsuit should not succeed. The bank should not file a lawsuit under this scenario; but if it does, you will need to hire an attorney, file and Answer and defend yourself. Do not ignore a lawsuit even if it should not have been brought. If the second mortgage was not a purchase money mortgage, but an equity line of credit secured by a deed of trust, then the anti-deficeincy statute does not apply and the bank could elect to file a lawsuit on the underlying note. If the second mortgage is a mixture of a refinanced purchase money mortgage and equity loan, then a possible defense would be to argue that it primarily retained its character as a purchase money mortgage and the anti-deficeincy statute applies. Again, if you are sued obtain an attorney and timely defend. If the bank with the second mortgage is threatening a lawsuit, you should have an attorney review your situation and perhaps a letter from your attorney could resolve the matter.
We had a house go to foreclosure and the lender ended up selling it. Now the bank of the second mortgage is trying to sue us for the deficiancy. the lot is less than 2.5 acres & house is single family. Can they do this or does this violate ARS title 33?
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