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How long is the statute of limitations in Az for a bank to sue you if you house foreclosed and they are the second mortgage

Scottsdale, AZ |

I had a HELOC and the house foreclosed. 1st wrote off the balance but PNC wants to settle with me. I dont know if I should settle or wait and see if they file suit against me. I re-fi'd the heloc but most of the heloc was purchase money, does this matter? The house foreclosed in May 2010

Attorney Answers 2


  1. Your situation raises an interesting legal question that I believe you should discuss with an attorney. There is no case law as of yet in Arizona that answers your question. The fact that a portion was purchase money refinance may raise an argument that you could use in your negotiations. That might be helpful in negotiating with the lender to minimize or eliminate their claim.
    The fact that it foreclosed in May 2010 is not significant at this time as far as I can tell.

    This of course is just general information and not legal advice.

    Greg Poulos


  2. Quick Facts about foreclosure in Arizona:

    - Judicial Foreclosure Available: Yes

    - Non-Judicial Foreclosure Available: Yes

    - Right of Redemption: None

    - Deficiency Judgments Allowed: Varies

    In Arizona, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

    Judicial Foreclosure

    The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

    Non-Judicial Foreclosure

    The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

    Power of Sale Foreclosure Guidelines

    If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

    Optionally, if it can be done without a breach of the peace, the trustee can post the notice at least twenty (20) days prior to the date of the sale, in some conspicuous place on the property to be sold and/or he or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.

    The trustee or the trustees agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a "credit bid," which means to cancel out some part (or all) of the money the borrower owed the lender on the lean, instead of paying cash. A successful high bidder must pay the bid price by 5 pm of the day after the bid, other than a Saturday or legal holiday.

    Once the sale is complete, the proceeds will go to the payment of the obligations secured by the deed of trust that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustees deed, which provides conclusive evidence that the trustee conducted the foreclosure sale property.

    A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure.

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    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States.