by Richard Keyt & Jeana Morrissey, Arizona Real Estate Lawyers; keytlaw.com
On July 10, 2009, Arizona Governor Brewer signed into law SB 1271 that is a major change to Arizona Revised Statutes Section 33-814(G) effective September 30, 2009. The law apparently is intended to protect only borrowers who "utilize" and "use" a home for at least six consecutive months from deficiency judgments, but only if they get a certificate of occupancy for the home.
This new law will cause lenders to file thousands of lawsuits to collect deficiencies from borrowers who will then be forced into bankruptcies.
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Cause lenders to file tens of thousands of lawsuits to obtain deficiency judgments.
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Create a burden on Arizona courts that are already facing large caseloads during a time when court operating funds are decreasing.
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Cause tens of thousands of Arizonans who incur deficiency judgments to file for personal bankruptcy.
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Make it less likely that investors will invest money in Arizona residential real estate, which means less demand for housing and lower home values.
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Have a substantial adverse affect on Arizona’s economy.
