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mags65malibu · Joined: 22 Jul 2009 Posts: 1 1.38 Dollars($)

What do you know about foreclosures? Namely, in arizona. We are 5 payments behind waiting for our mortgage company to tell us if they will modify our loan or not. Bought it for 210,000 and its worth 140,000 because of the market in that area. We dont want to lose it but we are worried. Can't refin because we are upside down. Can't sell because why would anyone pay 210,000 for a house only worth 140,000. We both are State of California employees and this was a second home. We recently had an income drop of $1450.00 altogether due to the furloughs our governor has placed on State employees. Help.

jenkin7 · Posted: Thu Jul 23, 2009 12:47 am Post subject:

Hi mags,

Since you are in financial difficulty and your income has dropped, I guess your lender will agree to modify your loan. A refinance is not possible since the property has gone down in value. But if your loan is owned by Fannie Mae or Freddie Mac, you may qualify for the Home Affordable Refinance Program, aimed at helping home owners with underwater properties.

In case you want to let go of the property, you can go for a deed in lieu of foreclosure. As far as I know, there are strong anti-deficiency laws in the state of Arizona. So, if there arises any deficiency from the sale of the house, the lender will not be able to sue you.

Guest

We have nice motorhome but we purchased at the wrong time , interest to high
what will happen if we let it just go back we are in N.H. thanks

adonis · Posted: Fri Aug 13, 2010 12:39 am Post subject:

Welcome nhziggy,

If you walkaway from the property and let the lender foreclose your motorhome, it will have a negative affect on your credit and the lender would foreclose the property. Moreover, after the foreclosure, you would be liable for paying off the balance dues resulting from the sale.

In my opinion, if you cannot pay the mortgage dues, you can speak to the lender and seek a deed in lieu of foreclosure. This will not only help you in getting rid of the property but you won't have to pay the deficient balance even. However, the credit effects would be similar to that of a foreclosure. Your score would get reduced by 250 points.

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What are the repercussions of foreclosure?