Gov. Jan Brewer has signed a bill that enables lenders to sue builders who undergo foreclosure for deficiency, or the difference between what’s still owed on the mortgage and the price at which the house was sold in foreclosure.
So, beginning Jan. 1, speculative homebuilders will no longer find refuge under Arizona’s anti-deficiency law.
Sponsored by Rep. Phil Lovas (R-Peoria), HB 2018 applies to spec or custom homebuilders who obtain mortgages to build new homes for sale to another person, but the homes are not completed or occupied at the time of foreclosure.
Spec builders and traditional homeowners cannot be sued for deficiency under current Arizona law.
Information from Phoenix Business Journal
