AboutBill Iannelli Expertise Anything to do with residental real estate: Disclosure, title issues, buyer and seller representation, foreclosure, ethics, rentals, landlord rights, evictions, inspection, time frames, Arizona purchase contract.
Experience 20 years in the business. Broker owner of Iannelli and Associates. Have my own real estate radio show "Real Estate Matters" every Saturday afternoon at 1:00 on 1510 AM KFNN. Listen to past shows at my website www.realestatematters.org.
Own my own portfolio of real estate, developer of apartments, commercial real estate and single family homes.
Organizations National Association of Realtors, Member of both the Phoenix and Prescott multiple listing service.
Publications Desert Advocate Newspaper Carefree Arizona. Question and answer column. Broker agent news, TV and radio stations.
Education/Credentials Licensed Real Estate Broker, BS in Education, certified real estate instructor on the code of ethics.
Awards and Honors Don't want to brag. Not important to the public. They want answers and advice not me telling them how many millions of dollars of real estate I have sold
I purchased a condo 3 years ago in AZ and can no longer maintain the negative cash flow - It has never been refinanced - is original loan (100 pct financing era -- 80/20) never cashed anything out. Does the non recourse apply in my situation? I am attempting to get a loan mod but they are uncooperative, am currently 1 month behind. Besides the credit score hit would I be responsible for the balance after the foreclosure sale? am leaning toward sending in the keys and saying take it back - only worth 35% of what I owe...
Thanks!
ANSWER: As outlined in Arizona Revised Statutes, Title 33, Chapter 6.1, a person may not be sued by his lender if the property is located on 2.5 acres or less and is a single family residence or duplex. This only applies if the decrease in value is not due to the homeowner's neglect.
Non owner occupied homes is a little gray area. They may try and come after you but with little success. Listen to my radio show this Saturday I am having my real estate attorney on to discuss this common question you bring up. If you are local it's Saturday at 1:00 pm 1510 KFNN. If you are out of town go to www.1510kfnn.com and listen live. If you miss the show listen to the podcast at www.realestatematters.org. You can go to that site and listen to an old show that discusses this very issue. It's called ask the lawyer.
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QUESTION: Thanks for your response, I have a follow up question. I called the lender and they suggested listing for a short sale with a realtor for 90 days. If no offers/not sold then do a deed in lieu of foreclosure where I deed the property over to the lender. What financial liability do I expose myself to in this situation - they said I'd get a 1099 for the amount not satisfied on the original loan - will I have to pay the 100,000 dollars difference between loan and actual worth of the property or is it forgiven in both cases (short sale and deed in lieu)
Thank You
Answer Once again this depends if the property is owner occupied and if the money borrowed was purchase money on the condo. If all the money was purchase money and not refinanced money where you took it out and spent it on other items you should be OK. You still will get a 1099 with a short sale and deed in lieu. You need to have the right accountant handle this that understands these type of situations. If there was no gain on the property there should be no tax. This is not intended to be legal advise. I don't really like the deed in lieu idea unless an attorney looks over the paperwork. Lenders will sometimes add clauses in the deed in lieu paperwork keeping you on the hook for monies owed. Be careful with that. I do many short sales. Drop me an address of the property and I will look it up and tell you if we have a shot selling it at short sale. bill@azrealestatematters.com
