The rules and requirements for preserving and pursuing a deficiency that results from a judicial foreclosure are the same regardless of whether the lender is foreclosing on a mortgage (which is the only foreclosure option if the instrument is a mortgage) or foreclosing judicially on a deed of trust (rather than by trustee’s sale). A.R.S. § 33-814(C); N. Ariz. Props. v. Pinetop Props. Group, 151 Ariz. 9, 725 P.2d 501 (App. 1986). The complaint must name the mortgagor or trustor as a defendant for purpose of effectuating the foreclosure, and may also name any other obligor against whom the lender may wish to establish a deficiency.
The lender must pursue the claim for a deficiency as part of the judicial foreclosure action. A lender who brings separate actions on the debt and to foreclose the mortgage must elect which one to prosecute and the other shall be dismissed. A.R.S. § 33-722.
Where personal service has been made upon the obligor, or where the obligor has appeared in the action, if the mortgaged property does not sell at sheriff’s sale for an amount sufficient to satisfy the judgment, the mortgagee may have general execution against the obligor for the balance. See Darnell v. Denton, 137 Ariz. 204, 669 P.2d 981 (App. 1983). But cf. Pioneer Fed. Sav. Bank v. Driver, 166 Ariz. 585, 804 P.2d 118 (App. 1990) (Based on constitutional due process standards, the court held that a foreign (viz., “Hawaiian”) deficiency judgment against an Arizona...
