20-557 - Arizona Statutes

20-557. Second mortgages A. An insurer may invest in bonds, notes or other evidences of indebtedness that are secured by second mortgages or deeds of trust on improved real property located in the United States. An insurer shall not make or acquire either: 1. A loan or investment if the total of the outstanding indebtedness of the first and second mortgages or deeds of trust exceeds eighty per cent of the value of the real property. 2. A loan secured by a second lien if the borrower, without the approval of the insurer, is entitled to increase the principal amount of the indebtedness secured by the prior first mortgage except to the extent the amount of the increase is applied in reduction of the investment held by the insurer. B. An insurer may invest in construction loans pursuant to this section if the real property is improved or will be improved with the proceeds of the construction loan and if the insurer's total investment in construction loans is not more than the amount prescribed in section 20-553, subsection H.