What is the Arizona Anti-Deficiency Act?

The Arizona Anti-Deficiency Act is designed to protect homeowners by preventing lenders from pursuing deficiency judgments following a non-judicial foreclosure of a primary residence. When a property is foreclosed upon non-judicially, the lender is limited in their ability to seek any remaining balance that might be owed on the loan after the sale of the property. This is particularly significant for borrowers who may find themselves in a difficult financial situation and may have lost their home; it ensures that they can move forward without the burden of additional financial liability from the lender.

Understanding this law helps to clarify the protective measures in place for homeowners in Arizona, specifically targeting situations where borrowers default on mortgages on their primary residences. It addresses the issue of fairness in the lending process, as without such a law, borrowers could face significant financial repercussions even after losing their homes.

The other options do not accurately reflect the provisions of the Anti-Deficiency Act. For instance, the option allowing lenders to pursue borrowers after foreclosure contradicts the very essence of the law. Additionally, limitations on how much debt can be collected or establishing minimum payment requirements for loan agreements are not components of this specific act. Thus, recognizing that the act primarily aims to safeguard borrowers from post-foreclosure collection