Five months ago, we published an article on Arizona’s anti-deficiency statute to explain our state’s law on the potential liability a homeowner may face if their home is sold for less than they owe.
…As quickly as it passed, Senator Pierce asked that his own bill be repealed. Did anyone read the bill?
There is another bill at the governor’s office (HB 2008) awaiting signature to repeal the original bill and add some protection for people who are renting homes that go into foreclosure. 8/25 Payson Roundup1
Thanks to Doomer AZSALUKI for alerting us to this story. He adds, "I just saw that they did repeal that bill passed back in july….the one that would allow banks to go after borrowers, even on their residence, for the difference between the loan and the sale amount on a foreclosure."
I didn’t immediately see anything to nail down the confirmation beyond this cryptic note2 from Thursday.
PENDING
…
- GENERAL GOVERNMENT (HB2008): Scraps plan to build $7.5 million emergency operations center. Reduce deposit to Military Installation Fund by $2.8 million. Eliminates $25 million advance appropriation for 21st Century Fund. Allows Commerce Department to use money from lottery, bond and economic development fund for operations. Requires lawful proof of presence in the United States to receive state and local benefits, with some exceptions. Allows counties to furlough workers for budget reasons without appeals. With exceptions, prohibits agencies from adopting rules that hike costs for other agencies, local governments or citizens. Puts two-year cap on local impact fees and prohibits adoption of new ones.
Well, it’s obviously an Omnibus Bill …
I’ll try e-mailing Sen. Steve Pierce (not Russell Pearce, hopefully I’ve got the right guy now) shortly, but in the meanwhile, any other Doomers out there have a link or further confirmation that AZ recourse is dead?
LATER: Oh, well, "two heads are better than one, even if one’s a sheep’s head". AZSALUKI’s finally got through to me the message that the AZ Republic’s Catherine Reagor really did definitively report3 that recourse mortgages died yesterday (see below — comment stream):
Foreclosure law
Some lenders held off on foreclosures during August to see if a controversial new law that would have allowed them to go after some borrowers’ assets survived the current Legislative session.
Arizona legislation passed in July would have made some homeowners in foreclosure liable for the difference between their mortgage and the resale price of the house starting Oct. 1. In the current housing market, the difference is generally more than $100,000 on the typical Valley home.
Real-estate lobbyists fought the legislation, and it was repealed Friday. Real-estate attorneys say there were lenders waiting to foreclose on properties until October, in case the law went into affect.
…
UPDATE 9/10: Thanks go to Sen. Pierce’s office for this definitive word …
————————————–
From: Steve Pierce
Date: Thu, Sep 10, 2009 at 12:12 PM
Subject: RE: Clarification Requested — HB2008: Arizona May Have Backed Off Recourse Mortgages
To: John M <john@housingdoom.com>
Dear Sen. Pierce,
I am the author of a recent blog post (see link above) that reports the possible repealing of the recently passed Arizona anti-deficiency statute. I have an interest in recourse mortgages and my blogging partner Debi is intensely interested in the AZ real estate market.
The evidence I was able to dredge up on the web was not quite enough to confirm that the new law had indeed been repealed (as reported by one of our readers). Might you be able to point me at information to settle this question?
Yours truly, John M.
——————————-
[1]: "Real estate legislation updates", by Ray Pugel, Payson Roundup, August 25, 2009.
[2]: "Highlights, status of Arizona budget bills", AP / AZ Republic, September 3, 2009.
[3]: "Valley foreclosures drop, but reasons unclear: Drop in foreclosure rates may be just temporary", by Catherine Reagor, Arizona Republic, September 5, 2009.
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it was just a quick blurb in the article on front page of today’s AZ Republic, “Good Sign for Valley Housing-Maybe.” (by catherine reagor)
When I googled that I got this article in web search (but not in “news”, weird)
“Valley foreclosures drop, but reasons unclear
Drop in foreclosure rates may be just temporary”, by Catherine Reagor, Arizona Republic, September 5, 2009.
But I don’t see your more explicit quote (from your comment in previous thread)
As they say, this story’s still a “work in progress”
you found the right article. it’s in there, under the heading “foreclosure law.” about 2/3 through the article. it looks like all they changed was the title when it went to print. the article lists a number of possible reasons foreclosures dropped a bit in august. perhaps all of these played a role (gov’t program, loan mods, short sales, etc.) but the pesimist (and armchair banker) in me believes that it had more to do with the possibility of banks being able to go after you if they had waited until oct 1 to foreclose. if that law stuck, why would ANY lender foreclose on a property in august or septemeber, when they could’ve waited a month or so and got a defficiency judgement?
Right you are
Don’t know how I could have missed seeing that the first time. Well done!
I know of real world examples in which people could afford to keep an underwater mortgage, but, opted not to. A purely financial decision. Now if they had to eat the loss, they would have chosen to lose money every month and hung on to the alligator.
I just want to know where my stock loss subsidy is.
I thought the bankruptcy bill change a couple years back was to give the banks more bite to collect. These are people with really good incomes, just big time spenders.
Igor says, “absurd”, and I have to agree.
Twist, do you think the gov is gonna extend the 8k tax credit and possibly enhance it to a larger amount and for all home buyers, first time and move up buyers?