FAQ - REFINANCES - FORECLOSURE IN ARIZONA
REFINANCES:
QUESTION: What about refinances of a loan that was originally a non-deficiency loan? Do they get the same non-deficiency treatment, though, technically, they were not the actual loan used to “purchase the property?”
ANSWER: In most cases, yes.
If the loan is not the original one that purchased the house, but a refinance of one that purchased the house? A "refi" will also often be covered by the same non-deficiency rule. In Bank One v. Beauvais, 188 Ariz. 245, 937 P.2d 809 (App. 1997), in which the court held that an extension, renewal, and/or refinancing of a purchase-money loan retained the character as a purchase-money loan, and therefore was subject to the same general qualification as a purchase money loan. This also applies to second trust deeds or mortgages if they were "purchase money" and were for residential property as noted above. See Mid-Kansas Federal Savings and Loan Ass'n v. Dynamic Development Corp., 167 Ariz. 122, 804 P.2d 1310 (1991).