Is our mortgage resource/non-resource? Also... should we short sale or walk?

[grijalva]

Hello everyone!

I'm glad I found this forum... It seems to have been very helpful to many... I hope we can find some advice since we are just too confused to even think clear now...

I've been reading lots of posts to see if I could have my questions answered without repeating a topic... but I still am very overwhelmed and can't seem to get the answers..

Thank you!! for your help in advance.

We live in Arizona and my husband bought his house in 2004 for 113k with BofA, then he got a home equity loan with a Chase. in 2006 I think we decided to refinance the home just to payoff the equity loan. Our balance with BofA came up to 140k. Then in Dec 2007 when the home values started dropping we decided (following someone's bad advice) to refi the house again and take out all the money we could before it's value dropped... And so we took the loan to Countrywide and have a balance now of 173k with BofA. We got 25k cash I think back in Dec 2007 and used that money to purshace an investment property in May this year. We owe (well actually my husband does) 40k on this house and our payments are 450 a month. In the other hand... his first mortgage was costing us 1400/month and we just couldn't afford it anymore and stopped making our payments hoping we would get a modification.

I don't know if BofA is trying to get rid of Countrywide's homes or what they problem is with them. I don't understand why they wouldn't give us a modification. All they said they could do for us is a payment plan which obviously wouldn't work since we would be short about 700 dollars a month if we were paying both mortgages...

We then decided to do a short sale... before knowing we could be liable for the remaining of the debt. The home is not even worth 40k now and we owe 173k. That is just too much money to pay back to the bank. My husband makes about 35to 40 k a year and I just don't understand how we could afford to pay them. We also are very concerned about tax liability. We just wished we would have been smarter and gotten information on what could happen.

Could you help me figuring out if the house is non-recourse or recourse? From what I've been reading I think it's a recourse, which if I'm not mistaking would mean we can't just walk away from it without being held responsible for the balance due (I have read what this is called just can't think of the name now)*I read this post where they mentioned in Arizona the bank can't come after you if your property is less than 2.5 acres...*

Should we continue with the Short sale or is it better for us (debt speaking) to just let them take the home? We are not concerned about credit scores now... all we want is paying nothing or the least possible to the bank and the IRS.. We have no money

Please help... we want out...

[we're_still_reviewing]

Read the last paragraph.

Arizona Foreclosure Law


Good Luck to you