Can the lender come after you for the rest? Deficiency judgments in Arizona

Deficiency rules in Arizona, point by point

• Trustee's sale of a small home: no deficiency

  After a trustee's sale

  If the property is 2.5 acres or less and is limited to and used for a single one family or two family dwelling, no action may be brought for the difference between the sale price and what you owed.

  Ariz. Rev. Stat. § 33-814(G)

• Exceptions for deeds of trust made after 2014

  Deeds of trust originated after December 31, 2014

  The protection does not apply to a home builder's property bought in the course of its business and financed by a construction loan, to a dwelling that was never substantially completed, or to a dwelling that was intended as a home but never actually used as one.

  Ariz. Rev. Stat. § 33-814(H), (I)

• 90-day deadline to sue

  Within 90 days after the trustee's sale

  Where a deficiency is allowed, the lender must bring its lawsuit within 90 days after the sale. If it does not, the sale proceeds count as full payment of the debt, no matter the amount.

  Ariz. Rev. Stat. § 33-814(A), (D)

• Fair market value hearing

  In the deficiency case; within 30 days after a sheriff's sale

  You can file a written application asking the court to set the home's fair market value at a priority hearing. The judgment is reduced by the higher of the sale price or that value. After a court-ordered sheriff's sale, the application is due no later than 30 days after the sale.

  Ariz. Rev. Stat. §§ 33-814(A), 12-1566(B), (C)

• Court foreclosure of a purchase money mortgage

  After a sheriff's sale

  If a mortgage was used to buy a home that meets the same 2.5 acre, one or two family test, the judgment can be paid only from the sale of that home, not from your other property. The court can allow more only for loss in value caused by waste you committed or allowed.

  Ariz. Rev. Stat. § 33-729(A), (B)

• Short sale, deed in lieu and your deed of trust

  Before you sign

  The trustee's sale protection covers sales under the trustee's power of sale, and we found no Arizona statute that does the same for short sales or deeds in lieu, so get a written release of any balance. Also read your deed of trust: it may expressly bar the lender from collecting any balance after a sale.

  Ariz. Rev. Stat. § 33-814(F), (G)

• How a judgment is collected

  10 years, renewable

  A judgment can be enforced for 10 years and renewed by affidavit filed in the 90 days before it expires. Wage garnishment is limited to the lesser of 10 percent of your disposable earnings or the amount above 60 times the applicable minimum hourly wage.

  Ariz. Rev. Stat. §§ 12-1551, 12-1612, 33-1131(B)

The short answer in Arizona

Common questions in Arizona