- Associated Press - Thursday, May 28, 2015

PHOENIX (AP) - The Arizona Court of Appeals says a protection that borrowers have under state law for residential mortgage-related debt doesn’t apply to people who guarantee to back those loans.

Arizona law bars going after a borrower for mortgage debt above what’s recovered through foreclosure, and a 2013 Court of Appeals ruling said borrowers can’t waive that protection.

However, the same court ruled Thursday that loan guarantors can be sued if they’ve waived so-called “anti-deficiency” protections.

The case involves couples and companies that promised to back a subdivision loan whose borrower later defaulted.

The Court of Appeals ruled that the lender can sue the guarantors to recover its loss.

It said guarantors don’t require the same consumer protection as borrowers and that a guarantee would be meaningless unless it can be enforced.

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