i lost my house to forclosure, the bank on the home equity line is coming after me. can they do that?

Asked by Starting Over, 85225 Tue Jan 17, 2012

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John Juarez, Agent, Fremont, CA
Tue Jan 17, 2012
@Tim Watson…frankly…your advice is scary. Why are you offering what could be considered to be legal advice? Why are you advising an Arizona resident about his potential financial liability for his unpaid loan when you are in Georgia? Real estate laws differ from state to state.

Starting Over,

You need to see an attorney who is experienced in real estate law for proper advice.
2 votes
Randy Hooker, Agent, Chandler, AZ
Tue Jan 17, 2012
Consult with an attorney, now, not later.

Arizona is a non-recourse state, meaning if a mortgage loan was 'purchase money' to buy the home, then the lender cannot pursue you for the deficiency. HOWEVER, if your HELOC loan was NOT purchase money, then you could very well be in toruble.

Once again, this is not a legal forum, and this is not legal counsel. Reach out to a competent attorney right away.
1 vote
Terry Parrish, Agent, Phoenix, AZ
Wed Jan 18, 2012
Yes, Please contact a real estate attorney, the laws do differ from State to State. My understanding is that if the lien is not used to purchase the property, the Bank can come after you. I had a phone call recently from a friend of a client of ours - a judgement had been placed against them because they walked away from a home in AZ, with a second lien attached that was not used to purchase the home, the second lien holder went after them and through the court system, placed a judgement against them. I gave them the name of an attorney, the Attorney they contacted negotiated with the lien holder to accept less. It was not only a lien against the home that was foreclosed on, but a debt that followed them. It would absolutely benefit you to contact an attorney who specializes in distress property to gather facts and know your legal rights and options.
0 votes
Bill Parker,…, , Scottsdale, AZ
Wed Jan 18, 2012

I have given Thumbs Up to both Randy and John. Tim, the 1099 part is correct if there is "forgiveness of debt" involved, but the rest is scary! Way too many variables for anyone to accurately answer this question.

Once again, I recommend people in Arizona with these types of questions call Kristi Collins at the Scottsdale Law Group as this is their area of specialty. She can be reached at: kcollins@scottsdalelawgroup.com or 480-478-0709.

Tough situation. Best to know your options and rights, than wing it with ad hoc advice from amateur attorneys.
0 votes
Sandra Paulow, Agent, Pinetop, AZ
Wed Jan 18, 2012
Talk to a Real Estate Attorney. It depends on the circustances surrounding that Home Equity Line. Only an Attorney can tell you if you can be held liable for that debt. Good Luck.
0 votes
Doug McVinua, Agent, Gilbert, AZ
Tue Jan 17, 2012
Randy gave you good advice below.
Web Reference:  http://www.McVinua.com
0 votes
Sara Pichelm…, Agent, Chandler, AZ
Tue Jan 17, 2012
I would consult with an attorney .
If they tell you they can come after your debt, I would try to make a settlement with them
Web Reference:  http://azrealtorhelp4u.com
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Tue Jan 17, 2012
You really need to talk to an attorney. The answer to your question depends on the laws in your State. You need to know what your rights and obligations are and what options you have to deal with this situation. You may want to speak to an attorney who understands real estate, foreclosure and bankruptcy as that may be a solution of last resort.

Good Luck.
0 votes
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