deficiency judgment in AZ--attorney consult

[tdskkenn]

Hi there. What a great forum! It is amazing to see I am not alone in my stress over mortgage issues.

My husband bought our house in AZ before we got married, so I am not on the mortgage documents. It was 400k, with an 80/20, fixed rates, we've never pulled money out. Both loans are with Wells Fargo (WF). We have great jobs and various assets, such as IRAs etc... We are what you would call "soluble." In the next few months, we will not be able to make the mortgage payments though (unless we cash in our IRAs, etc... of course).

Because of work, we recently moved to another state, and the house sits vacant in AZ, no renter. We have not tried a short sale yet or a loan mod because we don't want to expose our financial picture to Wells Fargo.

Our property qualifies under the anti-definciency laws in AZ, and we think it is best for our future to just foreclose on the property. For a deed-in-lieu in AZ, we have to get the bank to agree to it, and thus expose our finanical picture to WF, so we have elected to stop paying our mortgage in January and stick our heads in the sand and hope the bank does a "regular" foreclosure. Our biggest fear is JUDICIAL foreclosure because the bank will discover we have some assets and great jobs.

Has anyone seen lenders go through a JUDICIAL foreclosure in AZ? Does anyone know whether a lender can get a def judgement through this means even though the property otherwise falls under the anti-def law?

Thanks for any advice/info you can provide.

Shanz

[tdskkenn]

Hi there. I posted a few threads down about judicial foreclosure in AZ and how I was worried the bank would come after us for a def judgment because we are soluble. I consulted with an AZ attorney, so I thought I would share what I learned. I was under the mistaken belief that if a lender pursued a judicial foreclosure, as opposed to the trust deed sale type of foreclosure, the lender could get a def judgment even if the property fell under the anti-deficiency law. I was (thankfully!) wrong. If your AZ property meets the specs in the AZ anti-deficiency law, the lender cannot get a deficiency judgment no matter what "type" of foreclosure process is used. The only exception to this is for borrower "waste" such as trashing the place or using a second mortgage to purchase things not related to the property.

I wanted to make sure I posted about this so the info is shared. I guess I answered my own question--wish I could delete my original post.

[kn011501]

tdskkenn - I am in AZ also and am in a similar situation as yours. Would you be willing to share with me who you used for your attorney consultation? We just got an offer on a short sale and I would appreciate some legal counsel.

Thanks,
kno11501 in AZ

[Moe Bedard]

The loan safe forum is sponsored by the attorneys on the home page that sponsor Loan Safe so that we can offer the advice on this forum for our members for free and their credentials have been checked out by Moe and Loan Safe and they have been authorized to work with us.........so please do not post the names of attorneys or firms on the forum that we have not yet authorized or checked on...........for a referral you would need to go to
your state's bar association.............or an attorney referral such as
National Association of Consumer Advocates – Consumer Protection Advocates and Attorneys

[kn011501]

My apologies - sorry about that ***! I will check the link you've posted and go that route. Thanks.

kno11501 in AZ

[Moe Bedard]

no problem.......

Here is the link for your state's bar association as well............
State Bar of Arizona

[The Professor]

As an unpaid participant on this forum (but I do view as golden the thanks I receive), I think it important to trust Moe's judgment relative to the lawyers he allows to advertise on this forum because he is able to closely monitor the services they render based upon feedback he gets from forum participants.

I do make one cautionary note. That is most of the procedural and substantive laws relating to foreclosure are state laws, effectively meaning we has something like 50 different bodies of law that control both the aspects of foreclosure. One lawyer cannot be expected to have this broad range of knowledge and that is why you will often hear me suggest that in most situations you need to seek the advice of a "lawyer skilled in real estate law and debt collection practices." To that I would add that it makes sense to find one qualified to practice in the state where the real property is located.

Take care,

Daniel