I am upside down on 1st and 2nd mortages in AZ. If I forclose will either lender be able to go after my land in New Mexico?

Please note that I am not licensed to practice law in Arizona or New Mexico, I am licensed in Minnesota. Also, please note that an attorney-client relationship will not be formed by this answer. Rather, I am providing some thoughts on the issues generally, based on my experience and the facts described in the question. Also, it seems that there is a typographical error in your question, in that it states "If I foreclose", even though the other facts mentioned in the question seem to indicate that you are the borrower, not the lender. So I am providing this answer on that basis, i.e., that you are the borrower and would be foreclosed upon. Without knowing more facts (such as the provisions of the loan documents and the form of ownership of the real estate) or looking into applicable law, the lenders on the 1st and 2nd mortgages could pursue recourse against your other assets (such as your New Mexico land) if their mortgages are not satisfied by the foreclosure sale proceeds, and assuming that the loans secured by those mortgages are "full recourse" loans, and assuming that the foreclosure method is one that would allow the lenders to preserve a deficiency judgment (which the lenders could then take and get a lien on other assets you own). I am also assuming that you own these properties personally. If the properties are owned through entities (such as a limited liability companies or partnerships), then this would not necessarily be the case. That is why people often own investment property through entities, rather than personally.

THIS ANSWER DOES NOT CONSTITUTE LEGAL ADVICE OR FORM AN ATTORNEY-CLIENT RELATIONSHIP.

Read my blog at www.marcmccain.com to get some general rules on foreclosure in Arizona. The short answer to your question is that if your property is a single 1 family or 2 family dwelling on 2.5 acres or less and used as a dwelling, then if the 1st lender forecloses, all it gets is your property - it can't go after your other assets.

The 2nd is a different story and the answer depends on whether the loan is a purchase money loan. A purchase money loan is one used to pay all or a portion of the purchase price. If the 2nd loan is a purchase money loan, the 2nd lender won't be able to pursue a deficiency even if the 1st forecloses and wipes out its security.

These general rules cover most, but not all fact scenarios. In addition, this all assumes Arizona law applies -- check your loan documents and especially your note.

If you want an attorney to review your loan documents and confirm your rights and obligations, contact me.