When lenders operate across state lines, they typically specify their home state's law will govern. Most parties overlook these provisions.
The Case
An Arizona borrower obtained financing from a California lender. California law applied to the Arizona lawsuit, and the lender had no right to a deficiency judgment — costing millions.
Key Takeaway
Real estate loan enforcement rules vary significantly. Consult attorneys licensed in the relevant states before accepting choice-of-law provisions.