Can the banks come after a person that walks away from their 2nd hom in AZ? More specifically, can they come after the person's primary residence in another state? Can they sue for any part of what they lose? Just trying to find out the ramifications if my Dad, who lives in CA, forecloses on his AZ property. Any advice is a big help!
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The Arizona anti-deficiency statute applies to purchase money loans for residential properties that are 2.5 acres or less. Assuming the 1st mortgage forecloses, if the 2nd was not part of the purchase of the home (taken out sometime thereafter) then the 2nd has a right to sue under the note. If the 2nd was traceable to the purchase (like an 80/20 loan) then the 2nd should not be suing. If the 2nd sues then the borrower has an affirmative defense.
In general, if a creditor has a judgment and the debtor is located in another state, the creditor can “domesticate” the judgment in the other state and then enforce it under the laws of the other state.
Hope this helps.
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The second was paid off. This would just be the 1st mortgage. So this essentially means they cannot sue for the defficiency?Comment
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If the 1st was "purchase money", no deficiency if property is 2.5 acres or less.Comment
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But, from what I am hearing, if the bankl sells the property, they can 1099 you for the difference and you may have to pay tax on that? Oy VeComment
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If the bank foreclosed they can issue a 1099 but that does not mean you have to pay taxes. If you get a 1099 go to a qualified CPA to do your taxes.Comment
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