More Common Questions on Foreclosures in Arizona
Here are a couple questions I am getting over and over again…
Q: We currently have 2 properties. Home 1 which is listed as the primary residence, and Home 2 that we actually live in, which is listed as our 2nd home. If we foreclose on Home 1, can the lender sue us for their losses if we also foreclose on the 2nd home within a few months of each other? Would the lender be able to garnish wages?
A: That’s a great question. Keep in mind, I’m not a lawyer- and it’s always best to consult a Real Estate Lawyer for anything like this. However, I can tell you my understanding and experience with all this.
I believe that yes, the lender on your 2nd home can pursue a Deficiency Judgment from you, since, it was not your primary residence. The Homestead Exemption only applies to your primary residence. And, since the 2nd home was NOT your primary residence at the time of the Notice of Default, , they could come after you (in case you were wondering about ’switching’ your primary over after Home 1 forecloses). Yes, if awarded in court, they could get a judgment against you, which, ultimately, could turn into wage garnishment. However, in my experience, I have yet to see a lender do that here in the State of Arizona. That doesn’t mean they don’t or can’t- I’ve just never seen or heard anyone having it happen. Let me be clear here- it is my understanding that yes, they CAN pursue a judgment and garnish your wages on the 2nd home.
Instead of letting them foreclose, have you thought about working out the short sale on both of them? That would satisfy the lenders in each property, as well as keep the foreclosure off your credit. With President Bush’s new plan, you are also not responsible for paying taxes on the amounts the lenders discounted. Give me a call and let’s discuss the situations- let me see if there’s anything I can do to help keep these from going to the foreclosure sale. There’s no pressure, or cost to you whatsoever- in fact, if you owe more than the property is worth, the lenders pay my fees as a Realtor, once we sell the homes. I don’t get paid unless we can sell your homes. So I am just as motivated as you are to resolve this. Give me a call and let’s chat about all your options.
Q: If I stop making payments on my Home Equity Line of Credit (HELOC), can the bank foreclose on my home?
A: Yes. Most people don’t realize that a HELOC is the same thing as a mortgage. Just because they give you checks and even a credit card to use for purchases, does not mean that it is unsecured debt. a Line of Credit is a Secured Debt or Lien/Loan against your property, just like any other 1st or 2nd mortgage is. They have all the same rights that a normal lien holder would, including, the ability to foreclose on your property if you default on your payments.
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