The Dangerous SB-1271 for Arizona

What are some of the elements of bill SB-1271 that make it dangerous for the Arizona real estate market? Well let's take a look at some them pointed out in the letter the AAR CEO Tom Farley wrote to Governor Jan Brewer: Second/Vacation homes, rental property, and family-owned property may lose their anti-deficiency protection if the trustor did not utilize or occupy the property for six consecutive months. The loss of this protection could lead to deficiency judgments being placed on or against personal, real and perishable property. Bear in mind, deficiency judgments CAN result in the garnishmet of wages! Bankruptcy filings may increase because of this which will likely cause additional creditors to be harmed.

Another well thought out point Tom Farley addresses is that this amended statute is retroactive. So that it is not forward looking. The terms are not changed for loans that are originated after a future date, they retroactively affect all loans that have already been created. Also, lenders that receive TARP funds are also authorized to seek deficiency judgements against property owners after foreclosure. So a lender can foreclose... get a deficiency judgment... AND receive TARP funds? And all of this in one of the fastest states to file and foreclose on a home. Tom Farley is correct when he says "There are many reasons, .....to be profoundly concerned about the consequences of this bill".

A Call to the Arizona Governor

Apparently the Arizona Association of REALTORS has written a letter to the Arizona Governor Jan Brewer. It is a request to Amend the Call for Special Session to Address Issues Resulting from SB 1271's passage. In a letter dated July 22, 2009, AAR CEO Tom Farley writes a three page letter accompanied by 30+ pages of Case law and practical issues backing up his claim that the recently passed SB 1271 amendement to the anti-deficiency statutes has gone too far and shifts the now balanced power between owners and lenders to the lenders favor. In the form of a fast foreclosure, and a double recovery for the lender. Thereby minimizing the possibility a lender would even consider working with a homeowner in distress since they could foreclose the property quickly for pennies on the dollar and pursue the deficiency from a judgement easily obtained. CHECK BACK FOR MORE!