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

[Nick J.]

Originally posted by Daniel Bruckner:

So you know, the bank CANNOT begin a short sale process without the payments being behind.

That's not true at all.

Originally posted by Daniel Bruckner:

In AZ, for the lender to begin the foreclosure process would require for you to be behind on payments by three months

Not true either

The 'fact' of the matter is short sales are commonly started without the borrower in default. The borrower only has to show they will fall behind soon because of a recent event reducing their income.

AZ is a non-judicial state but that does not mean the lender has to wait three months before they can begin the foreclosure process, they can accelerate the loan at anytime they feel their loan is in jeopardy.

I certainly welcome you to BP and welcome your contributions to the forums as a fellow investor. Please get your facts straight before posting incorrect information and stating them as facts.