Legal Question in Real Estate Law in Arizona

In 2007, I refinanced my home and took money out to do a series of upgrades on my home. The balance of the cash is being used to make my 1st and 2nd mortgage since my monthly income is not sufficient. I have excellent credit and the only expenses I carry from month to month is my mortgage. I tried twice to get my mortgage servicer to modify my 1st mortgage but was denied. Recently, I tried to refi my mortgage and was not approved because my debt to income ratio is too high. If I walk away from my home, can I be hit with a deficiency claim against me for my 2nd mortgage? I live in Arizona and my mortgage is owned by Fannie Mae.


Asked on 8/12/10, 7:20 am

1 Answer from Attorneys
Riley Snow The Law Office of Riley S. Snow PLC

From the information you provided, the owner of the 2nd mortgage could most likely pursue you for a deficiency under AZ law. However, a review of you loan documentation could show otherwise. You may attempt to negotiate a settlement on both loans now, or find a buyer for a short sale. If lenders agree to settle for less (such as in a short sale situation), they often release their claims to any deficiency.

Let me know if I help.

Best of Luck,

-Riley

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Answered on 8/17/10, 10:49 am


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