Foreclosure in 85248>Question Details

Paf, Other/Just Looking in 85248

Relocated and still have a house we can not afford in Chandler AZ.

Asked by Paf, 85248 Mon Feb 22, 2010

We have a renter but still upside down $700 a month on our house in Chandler. I have been out of work for a year and we have gone thru all our savings. How do we get rid of this house. We did a modification last year and it lowered our payment by $200...not enough help we are still $700 in the hole. Our neighbors just sold the same house we own for $267 and we owe $430 on it. The market will never come back that much for us to make money on the house. What should we do...short sale (which we were told that the bank might not even accept it) or forclosure? Can yo sell your house and than still owe money on it and get a loan to pay off that amount?

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Please consult with an attorney before moving forward with any decision. You mentioned that you modified your loan. By doing so you might (or might not) have lost the protection offered by the anti-deficiendy statute. I am not a lawyer and can not provide legal advice, but it is my understanding that the proteciton is only for purchase money. If your loan modification was done similar to a refinance you might have lost that protection.

If you do a short sale you will be getting a settlement from the bank, where the deficiency might be forgiven, or they might ask for a non-secured promisory note. That might be your best alternative. If you foreclose and you are not protected by the statute they might come after you for the deficiency.

I live and work in that area and will be happy to assist you.

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart -
1 vote Thank Flag Link Mon Feb 22, 2010
Hello Paf,

It sounds like your bank is willing to work with you, first I would contact them and ask them what options they will offer you. Then I would suggest you speak to an attorney. Once you know your options you will be able to decided which way to go. If you need some resources please give me a call.
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1 vote Thank Flag Link Mon Feb 22, 2010
Daniel J. Mcnul...
Gilbert, AZ
Have you made contact with a lawyer or accountant on this matter yet? I've got contacts who will not charge you to talk about this matter.If you do a short sale you will be getting a 1099 from the bank at the end of the year which may or may not be taxed as income. The deficiency might be forgiven, or they might ask for a non-secured promisory note.

If you allow the bank to foreclose and you are not protected by the statute they might come after you for the deficiency.

I've helped others in situations like this prior, no situation is the same however but we may be able to help.

We are a property management company and manage hundreds of homes in the East Valley and may be able to help you if you contact us quickly.

Dan McNulty
Arizona Elite Properties
Elite Landlord
0 votes Thank Flag Link Tue Oct 5, 2010
Dear Pat:

Sorry to hear about your situation. Arizona is a "non-deficiency" state, meaing that in normal situations, the lenders are prohibited in coming after the homeowner/borrower for the difference on the shorted payment in a short sale.

If you need to sell the home, my short sale negotiator will strive to get you a release from any further obligation when your home sells. Most Realtors will be able to coordinate this for you.

By the way, banks prefer a short sale over a foreclosure because they will get a higher price.

If you would like to see the Arizona statutes that deal with this subject or an excellent webinar that will answer most of your questions, feel free to contact me.

Regards, Jeff

Jeff Masich, Realtor
Arizona Homes and Land
HomeSmart Realty
0 votes Thank Flag Link Mon Feb 22, 2010
Short Sale is absolutely one of the options that you should evaluate at this time. Lenders are very aware of the market and your situation clearly seems to indicate a hardship. I'm sorry to hear that you are out of work and have gone though your saving as well.

Short Sales are done at no cost to you, the banks would pay the fees to us. We would send you all of the paperwork to sell the house, the Short Sale paperwork etc. The Short Sale process could be made pretty simple on your end, we would handle all the details locally in AZ. Typically you would not need to even come to AZ, we could do everything remote for you.

It is possible that you would have an amount to pay back to the bank. Lets talk soon and further evaluate your situation to determine the particulars of your Short Sale and the best course of action to take.
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0 votes Thank Flag Link Mon Feb 22, 2010
A short sale sounds like the only option other than foreclosing on the property, being that the loan modification didn't help you. Visit our website to research the short sale option and if you chose to go that route, don't hesitate to call.
0 votes Thank Flag Link Mon Feb 22, 2010
PAF, actually a short sale would be very beneficial for you. However, in order to be certain the advice I am providing you is the right avenue for you I would need a bit more information. My team does a lot of short sales and there are many things to take into consideration before attempting a shortsale. How will this impact you? Will you owe money when the short sale is complete? Will you be facing tax consequences? I would welcome the opportunity to discuss your options. Please feel free to call. No pressure - EVER!!! Even if you are just looking for an answer to a question. 602=565-0192.
0 votes Thank Flag Link Mon Feb 22, 2010
Hi Pat. Unfortunately, there are no loan programs that I'm aware of that will allow you to sell the home and initiate a 'new' loan on the difference. Once the home is sold, there's no security to attach to the lien, and in order to sell a home and bring 'clean title' to the new buyer, all liens on the home need to be satisfied by paying them off from the proceeds of the sale, OR an agreed upon short-sale in which your lender agrees to accept less than what's owed.

Aside from bringing the cash to the table at closing, which I'm sure is not a viable option, the only other choice you have is a short-sale.

You said the bank might not accept it. Do you have reason to believe they won't? If you have a valid hardship, there's no reason to believe they won't take a short-sale versus foreclosing on the home.

A short-sale, if done properly, saves them a TON of time/effort/money vs. the foreclosure, so they typically prefer this route to the alternatives.

Hope this helps!

Jim Mitchell
Century 21 All Star, REALTORS
Cell: 480.231.6769
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0 votes Thank Flag Link Mon Feb 22, 2010
What Stephanie said.

No, you can't sell your home and get a loan for what you still owe to pay off that amount. There wouldn't be anything to secure that loan. Well, I suppose you could try to get an unsecured credit line, but that's a big chunk of change, it sounds like you wouldn't qualify (out of job with no savings) and the payment would likely be more than what you're in the hole for now.

I'd call Kevin Hardin. They do more than mediate mortgages and negotiate short sales. They'll cover multiple options.. It's an attorney's office. They're very good.
0 votes Thank Flag Link Mon Feb 22, 2010
Paf - You are 100% correcdt. If your neighbor sold for $267 and you owe $430 it will take many years to recover to that level. Speak with an expert Real Estate Attorney and Tax accountant in the Chandler Arizona area and review your options as well as how your decision will impact your credit and overall financial situation. There are rules and regulations specific to each state.
Best of luck with your decision!
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0 votes Thank Flag Link Mon Feb 22, 2010
PAF, it sounds like your best bet is to first try to short sell it. We as agents cannot give advice and all these options can have legal ramifications so if you can talk to an attorney or a tax advisor I would encourage you to do so. Good luck!
0 votes Thank Flag Link Mon Feb 22, 2010
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