Can banks make you pay a 2nd mortgage back when they take back the home by foreclosing the 1st mortgage in AZ?
My house is being foreclosed because the 1st and 2nd mortgage are in default. Both mortgages were created on the same date and were used to purchase the home. The 1st is for $224k, the 2nd is for $60k, and the home price was $284k in 2007. Both mortgages were with the same bank. The home is now worth ~$220k. The bank is now foreclosing the 1st mortgage set an auction date for the house for June09. The same day we received the registered letter notifying us of the auction we also were informed by our bank that they sold the 2nd mortgage to another bank. The old and new banks are now claiming that we owe the $60k 2nd mortgage and it is not tied to the foreclosure! How is this possible? Is this legal? The home is in Arizona where I thought the only recourse the banks had was to take the house back. It's bad enough we can't afford our home and are losing it, but, for the banks to claim we owe $60k on top of it is mind-blowing? Can they really collect $60k and the house?
Why don't you sell the home before it goes to foreclosure? Selling it as a Short Sale is likely much better for your future ability to purchase a home, car etc.
You sell it as a Short Sale, it costs you nothing to do, the banks pay us to sell your home as Short Sale.
Let me know if you want more details on the process of Short Sales.
when the first foreclose and sell it auction, whatever left money goes to the second and so on, but if there's nothing after satisfying the first then the second will not get anything and you are not responsible to pay them back as long as it used for purchasing your house. If they call again then tell them that its non-recourse loan and not responsible after my house foreclosed and tell them also that they have to talk to your attorney next time. We(realtors) are not attorney so you can consult with an attorney for any other solutions...good luck!
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