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Specific Questions about deficiency law in arizona

Phoenix, AZ |

After looking at the wording of the arizona deficiency protection laws it looks like purchase money restriction only relates to mortgages AND not deeds of trust? Is this true? If so it wouldn't matter if cash was pulled out on a note secured with a deed of trust. Can someone clarify this for me?

Also, if you have the same lender for the 1st and 2nd loan, can they only foreclose through a trustee sale and then still be able to come after you for a deficiency on the 2nd loan?

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Attorney answers 2

Best Answer

The simple answer to your first question is that the laws apply to both mortgages and deeds of trust, assuming the property otherwise qualified for protection. However, if you've refinanced, a lender can bypass the limitations of the anti-deficiency statutes by bringing a judicial foreclosure action rather than pursuing the trustee's sale.

And yes, even if you have the same lender on both loans, and assuming the 2nd loan was not a purchase money loan, if the 1st forecloses through a trustee sale, the 2nd can pursue you for any unpaid amounts.

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Robert H Nagle

Robert H Nagle


I'd like to add that, if you are at risk with your 2nd mortgage, short selling may be a viable option for you, allowing you to "exit" the home without further impact on your overall credit.


I highly recommend you discuss your options with an experienced bankruptcy attorney. Most, like my office, offer a free initial consult.

Mr. Greeves is licensed to practice law throughout the state of Arizona. His office is in Tempe. He is authorized to handle IRS matters throughout the United States. His phone number is 480-345-8100 or his email address is His website is Please note that this answer does not constitute legal advice, and should not be relied upon. Each state has different laws, every situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.