Question: I live in California but owned a rental in Arizona that was foreclosed on. I had an equity line of credit on that home when it was foreclosed on. I believe I owed about $90K on that equity line of credit. Can they now come after me for the money? Is my only recourse bankruptcy?
Answer:
Well all you can do it wait and see what the bank sends you in the mail. They will either send you a 1099 or they will send you a judgment for the $90k. Now, I know that Arizona is a anti-deficiency state, however, there are 2 statutes that apply to foreclosure and in a lot of cases, homes that have 2nd mortgages do not fall into the category of either of these statutes because the money was not used in the purchase of a home. You might be able to work out a settlement with the bank especially if you threaten them with the bankruptcy card. A good attorney can help you with that. Worst case, most people just bk.
I wish you would have found us earlier… you could settle your note as well and save a lot of headache. Good Luck
I was foreclosed on back before December 2007. In December 2007 my home was sold by the bank for 148,500. My total owed was 152,900. I understand I may owe the balance.
Here is the question… I got a letter from a debt collector saying I owed $102,000. I am confused as to what this means?
Did the bank sell my house for 50k and then someone flipped it for $148,500? If that’s the case it was really quick. The bank took final possession in Dec of 2007 and the house was sold.
So in other words the bank sold the house to a friend for 50k and then he flipped it for $148,500? Is this legal? If it is it sucks because the bank has got to be getting a a kick back or the “friend of the friend is getting the kick back.”
I don’t mind paying my “fair” share but this seems shady…?
Update… I did get a 1099-A for the 148,500 the bank sold my home for. This is about a 5k difference. How can I owe 102k?
There are several things that may have happened in your case. First, you need to establish what type of foreclosure your home was in, was it a Judicial or Non-Judicial Foreclosure. Then you need to determine what type of loan was on your home, was a purchase money or did you refinance and obtain cash out. Once you have the answers to these questions, you can make some other determinations as to whether or not the collection agency has the ability to collect against you.
Having been a former investor of seconds, I can tell you that often collection agency’s purchase debts with very little hope of collection (and thus purchase the debt for very little money) they then take those debts and attempt to collect on them. This may be the case here but you would need to provide more information before a determination could be made.
Hope that helps and best of luck to you.