FAQ - ANTI-DEFICIENCY STATUTES - FORECLOSURE IN ARIZONA
ANTI-DEFICIENCY STATUTES:
QUESTION: What is a “deficiency judgment”?
ANSWER: It is a legal judgment against the borrower for any shortfall in a judicial sale of the property to meet the total remaining debt plus taxable interest, fees and costs.
To the extent the judicial or trustee’s foreclosure auction yields less than the judgment, a deficiency judgment could be available, provided the loan is not a qualifying “purchase money loan” on a residential property (a “non-deficiency” loan), as explained more, below. If it is not such a loan, in judicial sales of the property, whether under a mortgage or deed of trust, the Court lodges judgment for any loan balance, costs, fees and other expenses set forth by statute not meet by the proceeds from the auction. In a non-judicial foreclosure of a loan not qualifying for “non-deficiency” treatment, the creditor has 90 days to file for any shortfall after the date of sale . As noted, In the case of purchase money mortgages and trust deeds on qualifying residential properties and trust deeds, there is NO DEFICIENCY. See “qualifications” for that non-deficiency treatment, below.