Homeowner's liability after foreclosure

"Question: I am a real-estate agent in the West Valley trying to help homeowners avoid foreclosures on their homes. Some of the lenders refuse to discuss a 'short sale,' and notify the homeowner that even after the foreclosure, the homeowner will be liable for any deficiency on the loan amount. If a lender will not agree to a 'short sale' by reducing the loan, and the lender forecloses, will the homeowner be liable after the foreclosure? If not, will the homeowner's credit be affected?

Answer: Under the Arizona anti-deficiency laws, a lender generally has no recourse against a homeowner because the homeowner has no personal liability on a loan used to purchase the home. Unfortunately, many out-of-state lenders incorrectly believe that the homeowner has liability for any deficiency on the loan amount after the foreclosure sale. In regard to the homeowner's credit, by the time of the foreclosure, there are already several 'dings' on the homeowner's credit report."

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Homeowner's liability after foreclosure