Everyone Wins When a Foreclosure Sale Generates Excess Proceeds

By: Ben Reeves Introduction When a foreclosure sale generates more money than needed to pay off the lien, the excess proceeds usually go first to creditors in the order of their priority, and second to the owner after creditors are … Continue reading

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Conflicts of Laws, Deficiency Actions, and Statutes of Limitations – Oh My!

By: Ben Reeves What law governs a deficiency action if the choice-of-law provisions in the note and deed of trust conflict? The Arizona Court of Appeals answered that very question in ZB, N.A. v. Hoeller, No. 1 CA-CV 16-0071 (Ct. … Continue reading

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Arizona Supreme Court Holds a Credit Bid at a Trustee’s Sale Should Not be Credited to a Title Insurer Under a Standard Lender’s Title Policy To the Extent the Bid Exceeds the Collateral’s Fair Market Value

By:  Richard H. Herold The Arizona Supreme Court recently addressed what impact, if any, a lender’s credit bid at an Arizona trustee’s sale has on an insurer’s liability under Sections 2, 7 and 9 of the standard’s lender’s title policy … Continue reading

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California’s One-Action Rule May Apply to Federal Lenders

By: Anthony J. Carucci California’s one-action rule provides that “here can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property or an estate for years … Continue reading

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Guarantors Can Waive Anti-Deficiency Protections

By:  Richard H. Herold and Ben Reeves In Arizona, guarantors can now be held liable for deficiencies even where borrowers avoid liability due to Arizona’s anti-deficiency statute. Arizona courts have been active in the last few years in addressing the … Continue reading

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If Receiver’s Sales Aren’t Foreclosures, What Are They?

By:  Ben Reeves & Bob Olson When no statute specifically authorizes a court-appointed receiver to sell real property, what type of sale is it?  The Supreme Court of Nevada recently addressed this question, holding that “a receiver sale of real … Continue reading

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Are Vacant Lots Protected Under Arizona’s Anti-deficiency Statutes?

By:  Ben Reeves No, of course not.  Arizona’s anti-deficiency statutes only prohibit deficiency judgments after a trustee’s sale of a “dwelling”.  Under no definition can a vacant lot constitute a “dwelling”.  This was the Arizona Supreme Court’s holding in BMO … Continue reading

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Update – Prospective Waivers of “Fair Market Value” Hearings are Definitely Void.

By:  Ben Reeves In 2013, we blogged about the Arizona Court of Appeals’ determination that prospective contractual waivers of “fair market value” hearings are unenforceable as a matter of public policy.  The link to our prior blog post is here.  … Continue reading

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Guarantors Score Two Victories Before the Nevada Supreme Court.

By:  Bob Olson and Nathan Kanute On May 29, 2013, the Nevada Supreme Court issued two decisions that all real estate lenders need to be aware of because they have the potential to eliminate the ability of a lender to … Continue reading

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Nevada Supreme Court and District Court Issue Decisions Regarding Nevada’s Limitations on Deficiency Judgments.

By:  Bob Olson and Nathan Kanute In 2011 the Nevada Legislature enacted Assembly Bill 273 (“AB 273”) which amended NRS 40.459 by limiting deficiency judgments to the difference between the amount the lender paid to acquire the loan or obligation and … Continue reading

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Borrowers Can Avoid Liability Even After a Trustee’s Sale

By:  Ben Reeves Since a lender must have a valid debt and valid lien to conduct a trustee’s sale, a borrower that allows the foreclosure sale to occur impliedly agrees that the debt and lien are valid.  In Madison v. … Continue reading

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Amendments to Arizona’s Anti-deficiency Statute Exclude Homebuilders from Anti-Deficiency Protection

By:  Ben Reeves Last Tuesday, April 20, 2014, Arizona’s Governor, Jan Brewer, signed HB 2018 into law.  This bill closes a long-standing loophole that allowed commercial homebuilders to take advantage of Arizona’s anti-deficiency statute, even though the statute was originally … Continue reading

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California Amends its Anti-Deficiency Statute

By:  Ben Reeves As of January 1, 2014, California amended its anti-deficiency statute to stop mortgage lenders from “collecting” from homeowners on post-foreclosure debts.  Although the amendments were designed to tackle a purely consumer / residential real estate issue, only … Continue reading

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Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After Foreclosure Of A Deed Of Trust On Vacant Land

By Eric Spencer and Adam Lang Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a … Continue reading

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Guarantors Beware! A.R.S. § 33-814 May Not Save You from a Deficiency Judgment

By:  Ben Reeves In First Credit Union v. Courtney, 309 P.3d 929, 669 Ariz. Adv. Rep. 18 (Ct. App. 2013), the Arizona Court of Appeals rejected three creative arguments that A.R.S. § 33-814 protected the guarantors from paying on their guaranty.  … Continue reading

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Can You Waive the Right to a “Fair Market Value” Hearing?

By:  Ben Reeves We finally have an answer to the question of whether parties can contractually waive the right to a “fair market value” hearing under Arizona law – and the answer, according to the Court of Appeals – is … Continue reading

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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. … Continue reading

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A Lender Holding Two Liens Can Foreclose on the Senior Lien and Sue on the Junior Lien

By:  Ben Reeves In Wells Fargo Bank, N.A. v. Riggio, No. 1CA-CV-12-0430 (Ariz. Ct. App. June 4, 2013), the Arizona Court of Appeals held:  (i) that the “merger of rights” doctrine does not “merge” a lender’s first and second lien … Continue reading

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Arizona’s Anti-deficiency Statute, A.R.S. 33-814(G), Cannot be Prospectively Waived Says the Court of Appeals

By:  Ben Reeves In Parkway Bank & Trust Co. v. Zivkovic, 662 Ariz. Adv. Rep. 26 (Ct. App. 2013), the Arizona Court of Appeals held that provisions in loan documents purporting to waive the applicability of A.R.S. § 33-814(G) violate Arizona … Continue reading

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A Person Owning a Fractional Interest in a Vacation Home is Protected by Arizona’s Anti-deficiency Statute

By:  Ben Reeves In Independent Mortgage v. Alaburda, the Arizona Court of Appeals held that Arizona’s anti-deficiency statute, A.R.S. § 33-814(G), precluded a lender from suing its borrowers for a deficiency after foreclosing on the borrowers’ fractional interest in a … Continue reading

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A.R.S. § 33-814(A) and Bankruptcy Proofs of Claim: To File or Not to File…Conflicting Cases Leave Creditors With No Clear Answer

By: Ben Reeves Under Arizona law, does a secured creditor need to file a deficiency action within 90 days after a trustee’s sale to preserve the unsecured portion of its claim in a bankruptcy case? Or is filing (or amending) … Continue reading

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