Foreclosure process in Arizona

[Dismayed Homeowner]

Hello all,

I have NOT yet talked to an attorney, however I have talked to the bank that holds our Mortgage and Equity loan about this situation.

Due to a job loss and my having to go on disability, we can no longer afford to stay in our home. The mortgage holder tried everything they could (We believe) and there is just nothing they can do, due to the imbalance of our income VS our bills.

We hate to lose the home, we've been here for 18years, but just see NO WAY we can afford to stay. We owe nothing to anyone else, just this mortgage and equity line.The only option they offered was a short sale on the property, which I suppose is OK, however not sure exactly How this works? We understand, we cannot afford to stay.

We are current with the payments now, but see missing payments on both the Mortgage and equity line starting in Aug. Should we go ahead and start missing the payments and let the process unfold, or would it be best to agree with the bank and let them do a short sale ASAP?

I do not understand HOW this works though. If the house sells for less then we owe, am I still obligated for the Balance? We had an appraisal done just last month (trying to refi the loans) and turns out we are approx $18K, underwater.

If I agree to the short sale, are we going to have people tramping through the house while we are still here? Do we need to move out immediately or what? I do not particularly want people coming in and out of our home, while we are packing, trying to get out?

I have a little money saved, and could go find a cheap rental right NOW, but would it be better to wait? Can I legally leave and get a rental at this time?

As I mentioned, we have NOT talked with an attorney, just trying to get some advice before I have to do that....IF I HAVE TO???

Thanks in advance for any input......

Gary