Legal Question in Real Estate Law in Arizona

Here's my situation. I have two homes in Arizona. The house in Mesa was my primary residence until my husband lost his job in 2008 (and he hasn't had steady work since). We moved to our secondary home and let my son rent out the Mesa house.

We also took out an equity line of credit against the Mesa home. Part of that loan was used as the down payment for the second home (but not all).

We tried to modify the mortgage on the Mesa home but we were denied after 8 months of trying. At that time, the full amount of past due payments became due and payable and we simply couldn't pay it. The bank agreed to a short sale. After 2 months with no offers, we have now gotten a foreclosure notice.

I haven't been paying anything on the Mesa mortgage and only interest on the second mortgage, which I cannot afford to do much longer as my husband will be out of work once again in the next couple months.

My question: what are our options regarding the second mortgage? Will we continue to owe this loan after the foreclosure even though it is secured by the Mesa property? Can a lawyer help in this situation?


Asked on 8/17/10, 1:55 pm

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

You may well remain obligated on the second mortgage as AZ homeowners are not protected against second mortgage shortfalls as they are protected under first mortgages. Your best solution (as it appears you already know) is probably a short sale. If that won't work, direct negotiations may be in order. There are many good real estate agents and short sale negotiation companies that could handle the short sale for you. An attorney is typically best used in direct negotiations. The important thing to remember is banks typically want to move through this process quickly and with the least amount of risk. A negotiated settlement is appealing for them because they like avoiding the courts when possible.

If I can be of assistance in this difficult process, please let me know. (480) 231-4684; [email protected]

Good Luck!

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Answered on 8/23/10, 11:30 am


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