Johnson Foreclosures
The New Arizona Foreclosure Law
A new law that has just been passed by the Arizona legislature is threatening to pour more misery on already distressed homeowners in the State. If you are a resident of Arizona, and are currently in the process of foreclosure, the new law could quite literally cost you hundreds of thousands of dollars.
The new law, which will come into effect on The 30th of September means that homeowners that go into foreclosure will still be liable for the shortfall in their loan after the home, is sold. Now, you do not need me to tell you that this has huge and serious implications for all homeowners whose homes are worth less than the outstanding mortgage.
Take homeowners in Phoenix for instance, where home prices have fallen by over 40%. Consider a Phoenix homeowner who bought her house for $500,000 and it is now worth only $300,000. If she goes down the foreclosure route and the foreclosure is completed after the 30th of September, she will still owe the bank the difference between the amount her home is eventually sold for and $500,000. In effect she could be liable for owing her lender over $200,000.
Isn’t that a really scary proposition?
Apparently, the law was passed to discourage speculators who buy property to sell at a profit, but then promptly go into foreclosure when the value of the property falls below the purchase price. However, it makes no attempt to differentiate between genuine homeowners and speculators. The only criteria imposed is that those who have lived in their home continuously for the last six months are exempt from the new law.
This means that retirees who have a retirement home somewhere else are not exempt. Landlords who rent out their property are not exempt, neither is anybody who bought their property in the last six months. This new law will even affect parents that buy property for their kids to use when they are in college.
It is scary to imagine how this will affect the thousands of homeowners who are reeling from the collapse in house prices in the state. Arizona happens to be one of the worst affected states in the country, and this law could send the number of new bankruptcies soaring for the stratosphere.
The moral of this story is that unless you have an exceptionally good reason, it is in your interest to avoid going down the foreclosure route at all costs. You will be much better off considering other options. One such option is a short sale.
About the Author
Nick Johnson of Motiv8td Investments LLC has been helping homeowners avoid foreclosure through effective and successful Short Sales. To download your Free Report visit Payment-Takeover.com
Johnson County Foreclosure For Sale Fairway Roeland Park Mission Hills Area
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