A note came through my Inbox today that lenders are starting to lay the groundwork for a new version of Arizona SB 1271 – the bill that allows lenders to pursue deficiency judgments against homeowners who lose their homes due to foreclosure.
SB 1271 was passed this spring at the end of the regular session, but eliminated during a special session otherwise devoted to the state’s budget later in the summer.
As things stand now, homeowners who lose their homes to foreclosure are not liable for the difference between the amount of their mortgage and the sales price at the trustee’s sale; Arizona is what’s known as a “non-recourse” state.
This doesn’t necessarily sit well with the banking lobby, who want the ability to pursue deficiency judgments for that difference … even if this pursuit falls into the “blood from a stone” category in most cases.
And it’s worth noting that SB 1271 wasn’t eliminated because of its purpose as much as that it was a poorly-written statute with significant holes inherent in its language.
In other words, the Arizona Legislature didn’t object to the concept, just the syntax.
What can you do, dear readers? Get on the phone with your local legislators to tell them what you think of this idea before it’s formally introduced by the banking lobby. And think about how thin the margins are for most of us – not the folks who willingly are walking away from homes, but those who find themselves laid off or facing medical bills where the options are few and far between.
Not sure who to call or e-mail? Here’s the Legislature’s member roster.
[tags]Phoenix real estate[/tags]