Winter Visitor and Investor Mortgage Protections Changing

Dear Friends,

We have had a change to borrowers mortgage protections in Arizona. This is still a fluid situation but unless the Legislature can effect a change, the new law will go into effect on September 30, 2009.

Arizona's mortgage anti-deficiency statute protects homeowners if their home is forclosed on by a bank and the foreclosure sale price is less than what is owed on the mortgage. The bank or lending institution is prohibited from coming after the homeowner for the difference between what was owed on the mortgage and the foreclosed sale price.

As of September 30th, this will change. On that date a change in the law will require that the owner have lived in the house for at least 6 continuous months and have a Certificate of Occupancy in order to receive anti-deficiency protection. While this change (sponsored by banks and other lenders) was aimed primarily at investors, it will affect seasonal and second home owners who are here for less than 6 consecutive months.

The Arizona Association of Realtors is working to get this law changed while the Leglislative Special Session is still ongoing.

I am going to a legislative meeting tomorrow at the Capitol to see if something can be worked out. I'll report the results of that meeting in this blog later in the week.

Meanwhile if you know any investors or seasonal visitors who are in mortgage trouble, let them know about this change or have them call me at 602-370-1450 for additional details.

Thank you.

Richard