Rentals in 86429>Question Details

Jmr, Other/Just Looking in 86429

Is there any help for investment properties purchased with interest only loans for a loan modification or fixed interest rate?

Asked by Jmr, 86429 Thu Sep 23, 2010

I own 3 homes in Bullhead, AZ and 2 of those were purchased as interest only loans. Payments will be jumping up and my plan was to secure a fixed loan before then. However, the home values are worth half of what I purchased them for so I can't get a fixed loan nor can I affort the higher payment. The homes don't cover the payments now. Do you have any advise or an attorney I can speak with that can help me with my situation?

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Dear JMR:

The Arizona Department of Real Estate has an excellent publication entitled "Arizona Short Sale Advisory" that will answer many of your questions including where to get real estate legal assistance.

The Advisory addresses deed in lieu of foreclosure, foreclosure, short sales, loan modfications and more. To see a copy see the Arizona Short Sale Advisory link at: http://www.arizonahomesland.com/forsellersorlandlords.html

May I wish you the best.

Jeff Masich
Arizona Homes and Land
http://ArizonaHomesLand.com
0 votes Thank Flag Link Thu Sep 23, 2010
Candice is correct. Seek legal advice from an experienced real estate attorney. Here in Phoenix I work with
Bill Kozub Phone: 480-624-2777. He charges a $300 consultation fee.

As agents doing short sales we are are cognizant of the Arizona anti deficiency laws. If you have had human tenants living in the property for 2 of the last 5 years you will most likely qualify for "debt forgiveness" on the balance if the loan was used strictly for the purchase of the property and property improvements. This is true for a foreclosure under AZ State law, but not necessarily for a short sale. In the case of a short sale or deed-in-lieu-of-foreclosure you must get the lender to give you a "full release and satisfaction of debt" agreement (reviewed by your lawyer-banks can be sneeky), otherwise you will still owe the lender the unpaid debt short fall.

Short sales have the advantage of impacting your credit report for 2 years while foreclosure is generally 4 years.

For more on short sales try these links:
FINANCIAL CONSEQUENCES OF A SHORT SALE
http://www.arizona-dream-homes.com/ArizonaShortSale.html
SHORT SALE STEPS AND PROCEDURES
http://www.arizona-dream-homes.com/SHORT_SALE_PROCEDURES.html

Good luck.
Loren
623-688-0044
0 votes Thank Flag Link Thu Sep 23, 2010
As far as an attorney, you might speak to Kenneth L. Gregory. 928-704-7267. He works with Real Estate. If you end up needing to sell, you want to work with a Realtor who specializes and is certified in doing short sales, a CDPE is your best bet. CERTIFIED DISTRESSED PROPERTY EXPERT. That is what I do and I do a LOT of it. Unless the attorney tells you to allow them to go to foreclosure, DO NOT walk away. There are much better options and I would be happy to explain them to you at no charge to you. 928-303-6080
0 votes Thank Flag Link Thu Sep 23, 2010
Hello Jmr. Unfortunately, it's doubtful (although worth a try) that your lender(s) will perform a loan modification since these were 'investment' homes. The standard government loan mod program (HAMP) was designed for 'owner-occupied, primary residence' borrower's. I would still call each lender regardless of how you purchased them and tell them what is going on (ie: write a hardship letter). See if they'll at least look at your situation and attempt to do a loan mod through one of their programs.

There is also a chance (albeit slight) that the lender(s) might take the properties back on a 'died-in-lieu'. The lenders loss mitigation dept. can discuss that with you; each lender has their own set of guidelines regarding 'died-in-lieu' programs.

The other alternative is to find a good short sale agent in/around Bullhead area and short sale the properties.

Send me an email if you like and I'll send you a list of local real estate attorneys who can do a consult with you regarding your specific situation. I highly recommend it considering you're going to have some tax liability as well whether you short sale the homes or let them go into foreclosure.

Jim Mitchell
Century 21 All Star, REALTORS
jim.mitchell@century21.com
0 votes Thank Flag Link Thu Sep 23, 2010
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