Lenders are now getting more creative in their collection efforts. Often the homeowner is dealing with a national out-of-state lender, and it is difficult to get the out-of-state lender representative to recognize Arizona’s consumer protection laws. If one has a problem and the out-of-state lender persists in its collection efforts, you should contact an attorney to discuss Arizona’s anti-deficiency consumer protection rights.
OTHER NEW TWISTS
The out-of-state lenders are now applying a new twist. Lenders are looking over their documents, some of which contain provisions whereby the homeowner initially waived the consumer protection rights under Arizona’s anti-deficiency statute. The lender then asserts a claim for the full amount of the loan plus costs and fees, and the homeowner is exposed to a deficiency claim.
The Arizona Court of Appeals in Parkway Bank and Trust Company v. Zivkovic, 662 Ariz. Adv. Rep. 26 (2013) determined that Arizona has a strong public policy regarding homeowner consumer protections and that the anti-deficiency statute precludes a waiver of those protections in advance. The borrower/homeowner may not waive the anti-deficiency protections in advance, otherwise the lender can simply get around Arizona law by inserting an anti-deficiency waiver provision in each loan document. In short, the consumer borrower cannot be required to waive Arizona consumer protections in advance.
Lat J. Celmins