If a property owner does not qualify for the anti-deficiency laws under Arizona statutes, a deficiency judgment against the owner can sometimes be avoided by deeding the property back to the lender prior to foreclosure. This is known as a deed–in-lieu of foreclosure, and the homeowner is giving the property back to the lender in order to avoid foreclosure. By accepting the deed, the lender is agreeing to accept the property for the amount that the person owes, thus eliminating any potential deficiency. However, it is also important to mention that should a homeowner deed the property back to the lender, he or she may be taxed on the amount of the deficiency that was forgiven by the lender. Help navigating these intricacies may be provided by an experienced attorney. Contact Pak & Moring to discuss your situation and see if we can aid you in the nuances of this process.