non recourse language in loan docs

[InMesaAZ]

Since we're already in a non-recourse state with a home that meets the criteria, we're pretty confident that we are in the clear. my spouse is wondering if there is any specific non-recourse language we need to make sure is in our loan docs before we proceed with missing any payments.

[Moe Bedard]

It really doesn't matter what the loan documents say because state law super cedes any contract language that may conflict with the law.

If I remember correctly the language in your loan docs will be vague. Something like, 'XXXX may have the right to sue the borrower for damages in the event of default if the state where the mortgage is originated in is a recourse state' or something to that affect. I may be off on the words, but it will be something like that.

[StuckInAZ]

My understanding that is if the loan docs:
1) Specify the loan is Purchase Money
2) Don't specifically include language to the contrary

Then in AZ, as long as you meet the other loose requirements of the anti-deficiency law (less then 2.5 acres, etc), your loan will be considered non-recourse in the event of default (i.e. foreclosure). As Moe said, the loan docs won't actually state the words non-recourse (at least mine didn't).