AboutJonathan Dever, Esq Expertise Real Estate Law, Buying Selling, Investor, all types of acquiring property through "creative techniques" and fraud avoidance
Experience Super Lawyer by Law and Politics for the last three years, part of over 900 transactions in the last 6 years
Organizations Ohio Bar Assn
Greene County Bar Assn
Champaign County Bar Assn
Publications Personal web site and web articles
Education/Credentials JD - Capital University
MA - IU of Penn
BA - U of Cincinnati
Awards and Honors Super Lawyer 2005, 2006, 2007
Who is Who, Lawyers 2006, 2007
I have a property in Phoenix that I am renting out to tenants. I am upside down on the mortgage and the prices keep falling (currently worth half of what I paid in 2005). I have been trying to avoid foreclosure, partly because I was under the impression that the lender could sue me for the difference between what I owe and what they were able to sell the property for on auction.
I came across an article on a foreclosure website that said Arizona state law (statute 33-729) protects owners of homes from deficiency judgments when the property is on a parcel less than 2.5 acres in size. I looked up the statute on the state of Arizona website and confirmed its existence.
I am unclear, however, on whether I would enjoy that protection as an out-of-state (I live in California) landlord. If so, I should seriously consider this option as I can only afford to make the minimum payment on my ARM, which results in negatize amortization. The rent I take in is no where close to covering the fully amortized mortgage payment, let alone the HELOC, the taxes, and the insurance.
The other issue I'm not clear on, is whether or not my tenant would be able to sue me if the bank was to reposess the house prior to the end of his lease.
Thank you for your time and attention.
Answer You have several options you can choose from. Banks have a loss mitigation department that handle these types of issues. You can renegotiate your note, sell the property at a loss without a right to redeem, forebear, etc, etc...
And the tenant can't just sue you for no reason. They have a lease and a right to possession. A foreclosure and repossession does not change that fact and it does not give them a right to sue you just because you are in a financial pickle.
As this matter is a mitigation and debt restructuring matter, I can assist you if needed. Simply head over to my site www.deverlaw.com, click on the Contact Us menu, and enter your information. We will send you a bit of information about your choices and ways to get out from under this situation.
