Can a deficiency judgement passed in Arizona be applicable for collection on assets owned in California?
My primary residence is in CA and i have equity here. My second home is in AZ. The AZ home value is less than the loan amount. I have a 80%/20% (first and second) loan with the same lender. Interest rate and payments are high and not sustainable. In the case of a short sale (preferred) or foreclosure, can the AZ lender come after my CA home and other assests? AZ home is on 5 acres of land. Will lender (Aurora) be willing to negotiate a settlement of the difference owed? What is the probability of lender pursuing a judicial versus non-judicial foreclosure based on historical precedence?
Tony,
Your question is of a highly legal nature and should be presented to a real estate attorney.
Stew
Hi Tony,
I'm not a lawyer or accountant, but here is my two cents. The answer to your question is basically dependent on what your mortgage paperwork says. It is a recourse or non recourse loan? If it is the first, then yes, they can come after other personal assets. If it is the latter, then they cannot.
http://www.searchlightcrusade.net/2007/11/deficiency_judgmen…
In Arizona non-recourse loans are the standard. I'm assuming since your property is in Marana (my backyard), your loan was originated here. If not, check your state's standard, and then your loan paperwork.
Secondly, your question regarding Aurora being willing to 'settle' on the difference owed. Answer: Maybe. Give them a call and see what you can work out. I've had several clients who were considering short sales who were able to work a deal with the bank and not have their credit affected.
http://www.foreclosurelaw.org/Arizona_Foreclosure_Law.htm
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