A Non-Purchase Money Second Deed of Trust is Not Protected by Arizona’s Anti-deficiency Statute

By:  Ben Reeves & Julie Maurer

Arizona anti-deficiency laws do not prohibit a non-purchase money lender from suing on its note after foreclosure by a senior lender.  In Wells Fargo Bank, N.A. v. Brewer, No. 1CA-CV 12-0383 (Ariz. Ct. App. May 21, 2013 unpublished), the Arizona Court of Appeals held that Arizona’s anti-deficiency statute, A.R.S. § 33-814, did not prevent Wells Fargo from suing on its note after a senior lender foreclosed on the borrowers’ multi-million dollar home.

In 2007, Wells Fargo agreed to lend the Brewers up to $1,000,000 and secured the loan with a second position deed of trust recorded against the Brewers’ home.  Before Wells Fargo obtained its lien, however, a senior lien from a different lender had been recorded against the same property.  Wells Fargo’s loan documents did not restrict the Brewers from using the funds in any particular manner.  In fact, the record revealed that the home was complete and that it neither required repairs nor maintenance at the time Wells Fargo made its loan.… Read More »

Author: Ben Reeves | Leave a comment Tagged , , , ,

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