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Short Sale Arizona: Default On Home Equity Line Of Credit Arizona

Default Home Equity Line Of Credit Arizona
{At a kitchen table somewhere in Phoenix, Arizona. January 2016}

It’s a Wednesday – hump day. Dinner – is served. Pizza. Pizza is what you and your family have every Wednesday. It signifies the beginning of the end – of the work week. 2 more days until the weekend. “Who wants Pepperoni?” You ask.

“Me!” Jennifer says, “I want just cheese please” Lisa says – Jennifer and Lisa are your 6 year old twins. Your husband  says “I will eat anything”. He is right. He will.

It’s 7:00 pm. As you eat dinner you remember the old days when life was more stressful, back in 2012. That was the year everything came crashing down on you. The girls hardly remember – they were only 2 years old back then but the memory of the stress and uncertainty is still with you and your husband.

2012 was the year you lost your job. Your husband, tried to pick up the slack but it was too much. You began to slide – backwards. There just wasn’t enough money to go around. The cars, the diapers, cox, SRP, SW Gas, water, sewer, trash, insurance, the list of things that needed to be paid went on and on and on. There just wasn’t enough left over to pay your mortgage.

You – like so many others bought your Phoenix home during the housing frenzy of 2005. You remember the first day you saw it, that was the one. Your own slice of the American dream. Priced at only $300,000 it was a steal. You and your REALTOR® decided to make an offer, list price of $300,000 means an offer of $315,000 no contingencies, no home warranty requested, non refundable earnest money. That was common back then. Everyone was doing it. You remember the elation you and your husband felt when you found out – it was yours. No more sharing a bedroom for the girls. No more storing things under the beds when the closets were full.

$315,000 was a stretch back then, still you had to act or risk being priced out of the Phoenix housing market. At least that is what the experts said. You got it. Soon enough that $315,000 home was worth $400,000! Amazing! You remember the day you saw the commercial “Get a home equity loan and pull cash out – that boat – you deserve it! Vacation – where to?” It all made sense. Why shouldn’t you refinance and pull out an additional $75,000? Pay off your credit cards, put a serious dent  in your student loans. So – you did. Why not? Your Phoenix home would continue to appreciate – wouldn’t it?

Then it happened. The neighbors house, the one listed at $420,000 wasn’t selling. Seemed like just the other day that houses were receiving multiple offers, above asking offers, investors buying sight unseen, now, no traffic, no offers, no nothing. The economy began to slip. Less hours at work turned into no work at all. Now you have a $400,000 mortgage and not enough money to go around. Wasn’t long after, that housing values began to slip. $400,000 – $380,000 – $350,000 you knew where this was going. It was around this time you heard about something called a Short Sale.

It was almost too good to be true. The bank takes less than the amount due, really? “Yes”, your REALTOR® said. The REALTOR® was your neighbors son – he had been in the real estate business for a whole 2 years – like so many others, he passed his test and became the expert. “Just Short Sale your home and move on. . . .your home is only worth $300,000 now” he said. It made sense, you signed the paperwork and listed your home for sale. You thought about getting a 2nd opinion but you thought all REALTORS are the same – aren’t they?

60 days later and your home was SOLD. It was stressful, the calls from the banks {1st mortgage and the 2nd} were getting more frequent , but you got it done. Whew! You, like so many others, rented a home, a bigger home for less than your mortgage was, amazing! Fast forward 4 years and you are eating pizza with your husband and twin daughters.

“I’ll eat anything” your husband says as he reaches for the pizza. As you are handing it to him you hear it Ding Dong. It’s the doorbell. You look up and to the right at the kitchen clock – “who could that be? It’s past 7:00pm!” Your husband says “I’ll get it”. “No honey, go ahead and eat your pizza with the girls, I will see who it is.

You open the door. It’s a kid, at least he looked like one. “Can I help you?” you say. “Mrs Smith?” he says. You nod, and then it happens. “You have been served.” He turns away and quickly walks to his car. Served? What the hell? You return to the kitchen table with the family and open the letter. It’s a judgement. “This is an attempt to collect a debt. . . .” you read on.

The judgement is for that $75,000 HELOC you took out back on 2006. You thought that debt was gone when you completed your short sale back in 2012. You remember your neighbors son telling you ““Just Short Sale your home and move on. . . .your home is only worth $300,000 now” and what you asked after he said it: “it can’t be that easy, are you sure they cant come after us?” No he said – Arizona is a non deficiency state. It was all good enough for you. Now you are being sued – for the balance of your HELOC. $75,000

All of this could have been avoided IF you had only asked a competent Arizona REALTOR or Arizona Real Estate Attorney. It turns out, all loans are different. All scenarios are different. The fact that you took out that HELOC after you bought your home made it NON PURCHASE MONEY. Judgement.

Don’t let this happen to you. BEFORE you short sale your home, meet with a professional, someone that can give you the full picture, someone that can review your mortgage documents and give you a legal opinion you can rest on. If you would like a referral to an Arizona REALTOR that can help you buy or sell a short sale or a real estate attorney to advise you please contact me or fill out the form below. I can refer you to a competent REALTOR or Real Estate Attorney in Phoenix.

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Hi I'm Stephen Garner, I'm just a guy in the title industry {in Phoenix} trying to change how real estate agents market themselves and their services. To that end, I teach my clients HOW TO leverage sales technologies like WordPress, Content, Video, Camtasia, Final Cut X, iMovie and indexable IDX solutions to convey value and help your ideal client find you online when they are most interested in learning about you and your services. I work for escrows. Hire me!

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