In Arizona, the equity in a property is typically used to pay off any outstanding debts owed by the borrower to the lender or other creditors in the event of a foreclosure. If there is any equity remaining after the debts are paid off, it usually goes to the borrower.
However, if the outstanding debts exceed the amount of equity in the property, the borrower may still be responsible for paying off the remaining balance. Arizona is a non-recourse state, which means that in some cases, the borrower may not be liable for any deficiency balance. However, this depends on the specifics of the mortgage or other loans involved and whether the borrower engaged in any fraud or misrepresentation.
It’s important to note that the foreclosure process and how equity is treated can be complex, and the specifics may vary depending on the situation. It’s always best to consult with a legal professional who is familiar with Arizona foreclosure laws for guidance on your specific case.