Southwest Savings and Loan Association v. Ludi

In Southwest Savings and Loan Association v. Ludi, 122 Ariz. 226, 227, 594 P.2d 92, 93 (1979), the homeowners assumed a note secured by a purchase money mortgage and a note for a "property improvement loan" secured by a second mortgage. They defaulted on both. Id. The Ludis argued that because they assumed the two mortgages when purchasing the property, both were purchase money obligations, precluding a deficiency judgment. Id. at 228, 594 P.2d at 94. Addressing only the property improvement loan, our supreme court disagreed, stating: In order to determine whether the Ludis may claim any benefit from the anti-deficiency statute as a result of their assumption, we must look to the rights given them by their grantor. . . . The grantor gave Southwest a second mortgage and note, not for purchase money, but for a property improvement loan. That mortgage is clearly not covered by the statute. Id.