How This Protection Works
A revolving line of credit secured by real property, such as a home equity line of credit (HELOC), allows a borrower to draw funds at any time up to the credit limit. During a property sale or refinance, that flexibility creates a problem. If the borrower draws additional funds between the time the payoff amount is quoted and the time the transaction closes, the payoff figure could fall short.
A secured lender under a revolving line of credit against real property shall suspend the revolving line of credit for a minimum of forty-five days on receipt of a request for a payoff demand statement as defined in section 33-715 from an escrow agent who is licensed pursuant to title 6, chapter 7.
A.R.S. § 33-420.01(A)This statute closes that gap. Once the escrow agent sends the payoff request, the lender must freeze the line so no additional draws can be made for at least 45 days. Under this arrangement, the lender agrees to lend no additional money during the suspension. The buyer and the title company can rely on the payoff figure without worrying that it will change before closing.
What "Suspend" Means in This Context
The statute defines "suspend" clearly: the borrower is forbidden from increasing or incurring any additional debt on the revolving line of credit. The existing balance remains, but no new draws are allowed during the suspension period. This section shall suspend the revolving line of credit against real property for the full 45-day window.
This applies to any secured lender, whether they hold a mortgage, a deed of trust, or another security interest in the property. The statute does not affect foreclosure proceedings, trustee sales, or seller forfeiture rights under an agreement for sale. Those processes operate independently.