Anti-Deficiency Provisions

News & Analysis as of

Lenders Beware: Future Hurdles to Foreclosure Deficiency Actions May Lie Ahead

In an update to Kevin Stine’s June 6, 2014 article explaining the Georgia Court of Appeals decision to bid adieu to select foreclosure confirmation hurdles, the District Court for the Northern District of Georgia recently...more

Guarantors Can Waive Anti-Deficiency Protections

In Arizona, guarantors can now be held liable for deficiencies even where borrowers avoid liability due to Arizona’s anti-deficiency statute. Arizona courts have been active in the last few years in addressing the law...more

Are Vacant Lots Protected Under Arizona’s Anti-deficiency Statutes?

No, of course not. Arizona’s anti-deficiency statutes only prohibit deficiency judgments after a trustee’s sale of a “dwelling”. Under no definition can a vacant lot constitute a “dwelling”. This was the Arizona Supreme...more

A New Year and a New Arizona Anti-Deficiency Statute

In 2014, the Arizona Legislature enacted significant changes to the anti-deficiency statutes, which protect certain residential borrowers from a deficiency judgment following foreclosure. These statutory changes, which apply...more

Arizona Court of Appeals Expands, Then Narrows, Anti-Deficiency Protection

Like many states, Arizona protects homeowners from the “double whammy” of losing their homes to foreclosure and then facing liability for the balance owed on their mortgage loans....more

Certain Residential Developers are Unprotected by the Anti-Deficiency Statute after Foreclosure of a Deed of Trust on Vacant...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute (A.R.S. § 33-814) protects a borrower who started, but never completed, construction...more

Amendments to Arizona’s Anti-deficiency Statute Exclude Homebuilders from Anti-Deficiency Protection

Last Tuesday, April 20, 2014, Arizona’s Governor, Jan Brewer, signed HB 2018 into law. This bill closes a long-standing loophole that allowed commercial homebuilders to take advantage of Arizona’s anti-deficiency statute,...more

Anti-Deficiency Protection Held Not to Extend to Vacant, Unimproved Residential Lots

In a recent opinion, the Arizona Court of Appeals held that borrowers who obtained a loan secured by a vacant, unimproved residential lot are not protected from a deficiency judgment following a non-judicial trustee’s sale of...more

California Amends its Anti-Deficiency Statute

As of January 1, 2014, California amended its anti-deficiency statute to stop mortgage lenders from “collecting” from homeowners on post-foreclosure debts. Although the amendments were designed to tackle a purely...more

Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a single-family...more

California Amends Anti-Deficiency Laws

The California Legislature amended its major real estate anti­deficiency laws—Code of Civil Procedure §§580b and 580d—effective January 1, 2014. The amendments have been a subject of concern, but their objective, and likely...more

Arizona’s Broad Anti-Deficiency Protection Confirmed

The non-judicial foreclosure process affords banks and lenders a relatively “cheap” means of executing on their collateral in the event of a borrower’s defaults. That cheaper process comes at a price, however. Arizona has a...more

Expansion of California’s Anti-Deficiency Laws Means More Litigation For Creditors

Turning a narrow consumer shield into a potentially broad sword, this summer California expanded its anti-deficiency judgment laws to prohibit not only the judicial pursuit of mortgage deficiency balances, but also to declare...more

A Non-Purchase Money Second Deed of Trust is Not Protected by Arizona’s Anti-deficiency Statute

Arizona anti-deficiency laws do not prohibit a non-purchase money lender from suing on its note after foreclosure by a senior lender. In Wells Fargo Bank, N.A. v. Brewer, No. 1CA-CV 12-0383 (Ariz. Ct. App. May 21, 2013...more

A Lender Holding Two Liens Can Foreclose on the Senior Lien and Sue on the Junior Lien

In Wells Fargo Bank, N.A. v. Riggio, No. 1CA-CV-12-0430 (Ariz. Ct. App. June 4, 2013), the Arizona Court of Appeals held: (i) that the “merger of rights” doctrine does not “merge” a lender’s first and second lien into a...more

Arizona’s Anti-deficiency Statute, A.R.S. 33-814(G), Cannot be Prospectively Waived Says the Court of Appeals

In Parkway Bank & Trust Co. v. Zivkovic, 662 Ariz. Adv. Rep. 26 (Ct. App. 2013), the Arizona Court of Appeals held that provisions in loan documents purporting to waive the applicability of A.R.S. § 33-814(G) violate Arizona...more

Arizona Anti-Deficiency Protection Cannot Be Waived

The Arizona appellate courts continue to reinforce Arizona's anti-deficiency law by finding that a prospective waiver of anti-deficiency protections violates public policy and is prohibited. ...more

A Person Owning a Fractional Interest in a Vacation Home is Protected by Arizona’s Anti-deficiency Statute

In Independent Mortgage v. Alaburda, the Arizona Court of Appeals held that Arizona’s anti-deficiency statute, A.R.S. § 33-814(G), precluded a lender from suing its borrowers for a deficiency after foreclosing on the...more

Foreclosure Law – A Brief Overview Of California's One Action Rule And Anti-Deficiency Provisions

California’s one-action rule and anti-deficiency provisions (together, the "anti-deficiency provisions") protect borrowers that have defaulted on debt secured by real property. Those provisions limit the remedies available...more

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