One of the problems that politicians face is that after all of their legislative bickering they are forced to suddenly make a bunch of decisions at the last possible minute. And this was the case in Arizona at the end of our fiscal year last month. Of course the one that made the most news was our governor and her refusal to sign what was essentially her own budget. But there were other things being pushed through that you probably didn’t hear about.
SB 1271 started out as a jail district and property tax limits bill. But in a common political move they did what is called a “strike everything” amendment to the bill. What started out as a bill to benefit home owners and Arizona real estate investors got gutted by the banking special interest groups. And because Arizona banks have lost millions of dollars due to foreclosures our representatives were easily swayed into passing a bill that would help the banks.
The way I read the bill gives me this impression: Property investors will be liable for their debts but homeowners will still get deficiency protection if they lived in the home for six consecutive months. But I am not a lawyer. And the only way to interpret this new law is to see what happens when it is applied and challenged in the courts after it goes into effect in September. The only thing that remains unchanged when it comes to anti-deficiency is that those of us who are professional Realtors should advise our clients to consult legal counsel if anti-deficiency questions arise.
Jerry C said
Again, it appears Banks nor the Government have any culpability in the mess at hand and investors who have also lost millions are to blame. I would certainly be more sympathetic if Banks were more willing to work out reasonable solutions with people. My Banks were willing to give me a fixed rate mortgage with payments 20% more than the fully amoritized payments I could be making now, $22000.00 negative a year for 2 houses. Try buying an REO property and see how long it takes a Bank to get an offer accepted and get paperwork together to close an all cash deal? no wonder they are losing Millions of their Investors Money. Investors may just be the easy solution to get some of that money back, including interest. JC
Jeff Hunt said
Breaking news: HB 2008 which contains a repeal of SB 1271, the anti-deficiency legislation just passed House Appropriations.
raymond connors said
This law has me floored.. I can not believe this ,How do you change a law and go backwards so far..I have lived in my house , But moved out and rented it so that I could keep paying,, I am now at the mercy of the renter,,, I lost my business and .am in dire straights myself..I am up all night wondering if I am going to be living in the streets over this I am a Disabled vet…Help
Jeff Hunt said
HB 2008, which contains the repeal of SB 1271, just passed the House Appropriations Committee a few days ago. I don’t foresee it not passing through the rest of the legislative process at this point so we can likely wash our hands of this whole SB 1271 thing!