Arizona · A.R.S. §§33-729, 33-814Arizona anti-deficiency: when the lender can't collect the shortfall after a foreclosure

When Arizona trust property of two and one-half acres or less, limited to and used for a single one-family or single two-family dwelling, is sold under the trustee's power of sale, no action may be brought to recover the difference between the sale proceeds and the debt with interest, costs and expenses (A.R.S. §33-814(G)). For a mortgage given for the purchase price, or for a loan used to pay it, on the same kind of property, a foreclosure judgment can't become a lien on the debtor's other property or be enforced by general execution, notwithstanding any agreement to the contrary (§33-729(A)) – except, on the court's finding, for the drop in value caused by waste the debtor committed or permitted (§33-729(B)). For loans originated after December 31, 2014, these protections don't apply to a builder's construction loan on a dwelling built for sale, to a dwelling never substantially completed, or to a dwelling intended for but never actually used as a dwelling; substantial completion means a final inspection where one is required (§§33-729(C)–(D), 33-814(H)–(I)). Where a deficiency is allowed, the lender must sue within 90 days after the trustee's sale; the judgment is the amount owed less the higher of the sale price or the fair market value set by the court, and if no action is brought in time the sale proceeds fully satisfy the debt (§33-814(A), (D)). The statutes speak to trustee's sales and mortgage foreclosures; they don't address a short sale the seller negotiates with the lender.