Arizona law as of 3/2012

by Diane L. Drain, Law Office of D.L. Drain, P.A.

602-246-7106

www.DianeDrain.com

Deed of Trust
Trustees Sale ARS 33-807

Mortgage
Judicial Foreclosure ARS 33-721

Original loan documents

Promissory Note

Can the lender elect to sue on the Promissory Note instead pursuing a trustees sale or judicial foreclosure? Perhaps, but you may have a defense. NOTE: IF YOU ARE SUED YOU MUST FILE AN ANSWER IN ORDER FOR THE COURT TO DETERMINE WHETHER OR NOT YOU ARE PROTECTED.

Character of Property: 2 acres or less, utilized as a one or two family dwelling. (but law may be changing related to investor properties see your attorney)

Character of Property: 2 acres or less, utilized as a

one or two family dwelling & PURCHASE MONEY** If All Are Yes

If All Are Yes

If One Is No

Is the property 2 acres or less, utilized as a 1-2 family dwelling and the debt Purchase Money?**

If One Is No

No Deficiency ARS 33-814(G)

Deficiency, but complaint must be filed within 90 days ARS 33814(A)

If All Are Yes

No, if any of the above elements are missing

No Deficiency ARS 33-729(A)

*includes consumer goods purchased with real property ARS 33-730

Deficiency

No Deficiency ARS 33-814 (G) & 33-729 *but deficiency if Debtor caused waste to property ARS 33-729(B)

Deficiency

Judgment. Beware This is now an unsecured debt and dischargeable in bankruptcy.

**Qualifies as purchase money: Borrower intended to

personally occupy property upon its completion M&I vs Mueller. 1 CA-CV 10-0804 CV 2009-031468 (Az Ct Appeals, Div 1, 12/27/11). That portion of the original purchase debt that can be traced to new/refinanced loan. Helvetica Servicing v Pasquan, No. 1 CACV 100418. (Az Div 1, 3/20/12). (judicial foreclosure)

*Trustor liable for waste to property, regardless of anti-deficiency laws: ARS 33-806(B) (trustee sale) or 729(B) (judicial foreclosure)