Home Selling in Phoenix>Question Details

Sftxpt, Home Seller in Phoenix, AZ

If I short sale my property can my HELOC lender pursue me for the balance if i used the proceeds to pay off other debt.

Asked by Sftxpt, Phoenix, AZ Mon Apr 30, 2012

Short Sale and HELOC

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As everyone else has said only a lawyer can provide legal advice.

Although I would like to add two things that may or may not apply to your case.

A) When people short sale a property there should not be any proceeds available to the seller. All the proceeds usually go to the lien holder(s). Based on the description of a short sale it should be basically impossible for it to be any proceeds available to the seller. Again, the property is being sold for less that what is owed - so there should not be any proceeds left.

B) In general, holders of a HELOC can pursue the sellers for any deficiency. This is unless everything is carefully negotiated during the short sale, and the holder of the HELOC agrees in writting to settle for a lesser amount.

Again, this many or may not apply to you - and there might be exceptions to this.
1 vote Thank Flag Link Mon Apr 30, 2012
As many others have mentioned, you best to consult with a real estate attorney regarding your situation. Real estate agents are not licensed to provide legal advice. However, we can provide resources to help you in seeking answers to your legal and tax questions.
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Mon Apr 30, 2012
This question is most definately best answered by an attorney. Marc McCain wrote an excellent article about this very question in Maricopa Lawyer, "Counterpoint Redux: Arizona's Anti Deficiency Statues Do Apply to Short Sales". Within the article he explores the limitations of "purchase money loans" and reference case law established in the Arizona's Supreme court case Baker v. Gardner.

If you were my client I would encourage you to seek the counsel of an attorney who specializes in this type of law. The author of the article I mentioned is attorney Marc McCain with McCain & Bursh PLC and his firm's number is 602-604-2166. This is a much more complicated subject that I think any Realtor can address under the scope of what we are licensed to do.

Good luck and best regards,
Susan
0 votes Thank Flag Link Mon Apr 30, 2012
Technically they can; however, I suggest you get legal advice and a real estate broker who is experienced in negotiating short sales where a second TD is in place. Also if you are considering short selling your home, please note this is the last year of the Debt Relief Act of 2007. As of this moment US Congress has not extended the relief beyond 12/31/12.

I have extensive experience in negotiating short sales and hold the CDPE designation (Certified Distressed Property Expert). I will be happy to assist you in the short sale of your home.

You may contact me at 480-466-0264.

Best regards,

Milly Casas
0 votes Thank Flag Link Mon Apr 30, 2012
AS Doug mentioned, people often use the short sale process to reduce or eliminate recourse loan debt problems. This is done as part of the negotiation between homeowner and lender.

There are no solid yeah or nay answers we can give you on this forum. It does require a solid conversation where the many variables are outlined. We use both real estate and tax attorneys as part of the process. This is done because what you are talking about involves restructuring pre-existing contracts and dozens of legal and tax law questions best done by a really savvy law person.

Our team has worked on hundreds of short sale and has a lot of experience helping people like yourself. We'd be honored to help you as well.
0 votes Thank Flag Link Mon Apr 30, 2012
Maybe. Before you take any steps seek legal counsel. Part of the short sale negotiation should address this issue.
0 votes Thank Flag Link Mon Apr 30, 2012
Great question that we hear often, the best source for this is going to be an attorney. I would be glad to consult with you and provide a couple of good referrals that understand Arizona Real Estate law, Short Sales, Foreclosures etc.

Having experience in Short Sales would lead me to think its very likely you could have issues whether you Short Sale or Foreclose.

One good thing about Short Sale is that we can often reduce the amount you owe to a much smaller (sometimes 0) amount.

Give me a call or email, glad to discuss it with you and provide some clear direction.
0 votes Thank Flag Link Mon Apr 30, 2012
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