By Howard Fischer | Capitol Media Services
A special Arizona law designed to protect homeowners from lenders does not apply if the house was never built, the state Supreme Court ruled Friday.
In a victory for banks and other lenders, the justices said they can go after some borrowers who default on their loans if the value of the property is less than the amount owed. That would leave the borrowers both without the property and in debt.
Chief Justice Scott Bales, writing for the unanimous court, acknowledged that the Arizona Legislature voted more than 40 years ago to protect homeowners from these kinds of deficiency judgments when they walk away from mortgages.
