With the budget mess in Arizona, it is not clear whether Gov. Brewer would veto a revision to the new bill SB 1271, the anti-deficiency bill which allows banks to go after you for a deficiency judgement unless you lived in the house for 6 months. Many experts feel this bill will have a negative effect on investment properties, second homes, and investing in general in Arizona real estate.
The Arizona Association of REALTORS is pulling out all the stops and most of the local associations (Prescott, Central Arizona – Payson, Tucson, Phoenix, etc.) have emailed us with an urgent Call to Action. They want us to contact the governor and urge her to sign HB 2008.
Here are the talking points on why SB 1271 is bad:
- Removes any incentive for a lender to work with a borrower of a distressed loan
- Places the burden solely on the borrowers, allowing banks to conduct “risky” lending without consequence.
- Bankruptcy cases will increase dramatically since protection against deficiency judgment as been removed.
- Family owned property for children going to college or elderly parents may lose their anti-deficiency protection if the trustor did not occupy the home for six consecutive months.