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james caulki…, Other/Just Looking in Tucson, AZ

Can Bank of Arizona go after personal assets if the is 'deficiency' after the sale of land that I own in Tucson?

Asked by james caulkins, Tucson, AZ Mon Jul 30, 2012

Hello,
I have a loan for $75,000 with the Bank of AZ, for 3 parcel of land in Tucson. The land is only worth $20,000 now, and I would like to short sale the land. Will the bank be able to go after my personal assets to make up the deficient amount?

Thank you.

James

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Answers

6
The bottom line answer to your question is ... maybe.

During the process of the short sale, you will need to provide financial information to the bank that is as in-depth (if not more so) than you would if you were applying for a loan to buy teh property in the first place.

Additionally, the bank will look at your letter of hardship. So, if you are currently unemployed, behind on your bills, and struggling to just keep the power and water on, then the bank would be much more likely to forgive the debt and move on. It would not be in their best interest to get a judgment against you (blood from a turnip).

If, however, you have the financial assets that they could possibly recapture their loss from, they would be much less likely to approve the forgiveness of the loss.

I have seen many different outcomes to short sales over the last few years. They include:
1. denial and eventual foreclosure
2. full approval and forgiveness of outstanding debt
3. partial approval where the seller and/or buyer contributes some money
4. approval, but requiring the seller to sign an unsecured note to pay off the outstanding balance

A lot would depend on the financial institution, if they have it insured (Fannie / Freddie), etc.

Because it's not a primary residence, B of AZ might very well be able to persue your personal assets to make up the deficient amount. I would speak to not just an attorney, but to a bankrupcy attorney because they would be more familiar with these situations and what your options are.
1 vote Thank Flag Link Mon Jul 30, 2012
Just like in a home short sale, you want a waiver of deficiency in the agreement to sell. There are several good attorneys in Tucson who can help, and also Pima County has a legal program to ask questions for free. Do not sign/settle until you speak to a lawyer.
Flag Sat Aug 25, 2012
This question needs to go to your attorney and your accountant. They will need to see your contract and give you advise whether it is a short sale or a foreclosure.
1 vote Thank Flag Link Mon Jul 30, 2012
Just an advice I am not an attorney,, If you short sale your land, the lender will verify all your information regarding your assets,I suggest to consult an attorney and they will discuss any options you may have.
1 vote Thank Flag Link Mon Jul 30, 2012
I would say they can't but again Im not an attorney so I would go and seek advice from a Real Estate Attorney.
1 vote Thank Flag Link Mon Jul 30, 2012
I am not an attorney so take this as free advice not legal in any way. They will most likely sue for judgment if they win they can attach or go after wages and other holdings.
Get an attorney,
Good luck,
Brad
0 votes Thank Flag Link Mon Jul 30, 2012
That is a very good question James for an attorney, not a Realtor. I would recommend an attorney that deals with real estate or bankruptcy.

Spirit
0 votes Thank Flag Link Mon Jul 30, 2012
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