Arizona’s New Homestead Exemption Statutes:
A cause for anxiety or a sigh of relief for borrowers?
Presented by Delbert Evans, Kenn Neeley, Larry Folks, Scott Malm and Diane Drain
The new “homestead laws” are going to affect all our current and future clients. Until now, Arizona law made it clear that judgment liens did not attach and couldn't be collected from the homestead, with some exceptions. While the $250,000 increase in the homestead exemption is welcome, especially given current real estate values, the way this bill is written radically erodes the homestead protection that has been in existence since Statehood.
It adds language making past and current judgments attach as liens to our client’s homestead. The real nightmare will be the consequences when the owner refinances or sells their home; the judgments, now secured liens, must be paid in full (including the debt buyer’s extra accumulated interest and fees) before the homeowner receives any funds.
The original bill, introduced by the Arizona Attorney General, was intended to protect state tax liens. The debt buyers and creditors hijacked the bill in order to enrich themselves at the expense of the consumer’s home and family. These companies, with names like Investment Retrievers, Portfolio Recovery, Cash LLC, Paid in Full, etcetera, purchase old credit card or medical debt from the holder for a very low price (usually around 4 cents per dollar). They add on more collection fees and interest, and then sue consumers, obtain a judgment, and aggressively move to collect. These are far from innocent actors. Many have been sued by various governmental agencies for abusive collection practices, (e.g. the settlement between Portfolio and the Consumer Financial Protection Bureau which refunded $60,000.000 to consumers).
The other industries that were directly affected by this bill (title, lenders, realtors) did not support the bill. But felt they had to do their best to patch holes in the bill in order to protect their industry. The end result will make closings or refinances more complicated, costly and will take more time to complete.
ACBC did its best to add some language to protect debtors who already have discharges. But debtors who file for bankruptcy with judgments, but have not received a discharge when this law becomes effective, will need Section 522(f) orders, which makes all bankruptcies more complicated and expensive.
Speakers will discuss the new law and how it will impact all of us going forward.
(See below for any materials and Zoom link)
DELBERT EVANS has been in the title industry for 20 years. He started out with no knowledge of the industry in the customer service department. At various points has worked in residential, commercial and/or the foreclosure realm before becoming Chief Title officer and eventually managing the Title Department for the Arizona and Texas production centers of a national title company. Those production centers handled commitment prep, recording and/or policy production for 10 different states including involvement with underwriting decisions.
Currently he is a Senior Title Officer for Pioneer Title Agency. In addition to being the current Treasurer for the LTAA’s PAC he has also been chair of the Education Committee for the Arizona Trustee’s Association.
KENNETH L. NEELEY is a passionate entrepreneur and the owner of the Neeley Law Firm, PLC – a bankruptcy and debt resolution firm located in Chandler. He loves all things techie or creative (or preferably both). His clients appreciate how well he can explain debt relief options in plain language. Yet, for some reason he has a much harder time explaining himself to his wife in plain language. Fortunately, she still seems to understand somehow. He has five amazing kiddos, ages 9 to 20.
Professionally, he is most proud of his awesome staff and his two published appellate wins for consumer debtors: In re. Gray, 523 B.R. 170 (9th Cir. BAP 2014) and In re. Neidorf, 534 B.R. 369 (9th Cir. BAP 2015).
LARRY FOLKS has more than three decades of experience in protecting the interests of banks, credit unions and mortgage servicers in resolving defaulted commercial and consumer loans. He also has a substantial background as a foreclosure trustee and is a trained neutral in mediation of bankruptcy and other disputes.
A past chair of the State Bar of Arizona’s Bankruptcy Section, Mr. Folks is a Certified Specialist in Business Bankruptcy (American Board of Certification), and a Certified Specialist in Bankruptcy Law (Arizona Board of Legal Specialization); has served as a judge pro tempore of the Maricopa County Superior Court; and is a former partner of a national law firm. He is an active member of the American Legal & Financial Network, Arizona Trustee Association and United Trustees Association. He is a graduate of the Northwestern University School of Law.
Mr. Folks and his colleagues are proud to serve America’s major banks, credit unions, mortgage servicers and lending institutions and have a long-term commitment to protecting lender interests.
DIANE DRAIN is a conservative and practical advocate for her clients. As a well known Phoenix bankruptcy attorney, she truly believes that “when you find your passion, going to work every day is a joy, not a job.” Her clients and fellow lawyers will attest to her passion and commitment to excellence. “Our reputation is built on our client’s trust that we can help them during a very difficult time. Our commitment to each client is to provide them the best guidance we can.”
Awards: AV rated since 2006. Of her numerous awards, the one she cherishes the most is her Lifetime Achievement Pro Bono Award, presented by Chief Bankruptcy Judge Daniel Collins and the Bankruptcy Section - “for a career of overwhelming and extraordinary pro bono services in establishing the Bankruptcy Court Self Help Center and leadership in the bankruptcy pro bono programs.”
Mentorship: Diane believes that everyone has an obligation to give back to their community and fellow professionals. She follows the guidance of her mentor, James Kahn, who always has an open-door policy. As part of her commitment to her fellow attorneys, Gary Stickell and Diane created the Arizona Consumer Bankruptcy Counsel, a safe place for consumer bankruptcy attorneys to hone their skills.
SCOTT MALM is an attorney and a managing member with Gust Rosenfeld P.LC., one of the oldest law firms in Arizona and a perennial major sponsor of the LTAA convention. He resolves disputes for title insurance companies and their insureds, escrow agents, and similar real estate related clients in state and federal courts. Scott has been a lead lawyer in at least 20 published court decisions that have shaped title and escrow law in Arizona, including topics such as escrow duties, lien priorities and boundary disputes. He has been retained multiple times as an expert on title matters, regularly speaks at LTAA, ASEA and private title/escrow company events, and distributes the free Arizona Title Insurance and Escrow Law Reference Guide.
Scott is recognized in Real Estate Law by Best Lawyers® in America, is rated AV Preeminent by Martindale-Hubbell, representing the highest rating in legal ability and ethical standards, and has been recognized in the Southwest Super Lawyers® list for real estate law. He earned his B.A. and J.D. degrees, with honors, from the University of Arizona, and his M.B.A. degree from the Cardiff Business School, University of Wales. Scott served by appointment of the Governor on the Electronic Recording Commission, and also serves as a judge pro tem for the Maricopa County Superior Court, primarily assisting litigants to settle cases. Outside the office, Scott coaches youth football.
Materials
(Available on or before the day prior to the event)
YouTube Video of Program:
Arizona’s New Homestead Exemption Statutes - A cause for anxiety or a sigh of relief?
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