PHOENIX DEFICIENCY AMENDMENT
Recently, the Governor of Arizona, Jan Brewer
is getting ready to sign legislation that is supposed to take effect on September 1, 2009 eliminating our current anti-deficiency policy in the State of Arizona. This is HUGE. The banks, who are the ones on the band wagon here, have lobbied the Governor to change this law. Essentially, SB1271 would allow banks to go after homeowners for the balance owned on their home after foreclosure…..the difference between the amount they received for the foreclosure and the amount owed on the house. This also will affect investors because in order to be covered by the anti-deficiency law, the investor will have to prove that they have lived in the home(s) for a period of not less than 6 months.
Here’s a quote as described in layman’s terms:
Cause: One of the problems Arizonans facing foreclosure have is the very short timeline involved. We have one of the shortest in the nation – only 90 days from default. And now we are going to let banks chase defaulting borrowers for recovery above and beyond that which is recouped when the bank sells off the foreclosed house.
Effect: So suddenly the banks no longer have any incentive whatsoever to work with a borrower to resolve delinquencies. Now the bank can quickly foreclose, sell the house below market value and then go after the defaulting owner for the difference! This will in turn drive down Arizona real estate prices even further. Perpetuating falling real estate prices will only worsen our struggling economy. Furthermore, the relationship between the lender’s rights and the borrower’s rights will be seriously imbalanced by this change to the current law. The only winners here will be the banks who got us into this financial mess in the first place.
Our real estate market has taken enough of a hit, this will virtually kill it. If you can, call Governor Brewer’s office and express your concern about this terrible piece of legislation and tell her you support the Arizona Association of Realtors plea to her to revisit this decision as soon as possible through the special session.
I don’t know about you, but I’m getting worn out from all this government intervention and having to put my 2 cents in!
