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Discussion Starter · #1 ·
Wow, I stumbled upon this, which seems like significant Havi news considering all the walk-aways.

In the past, AZ was like Cali on deficiency judgments after a foreclosure – they pretty much didn’t exist. But on July 16, 2009, a new was signed which states a lender can pursue a deficiency judgment from a foreclosure sale. The new law goes into effect September 30, 2009.

In order for an owner to qualify for anti-deficiency treatment:

1. THE TRUSTOR (BORROWER) UNDER THE DEED OF TRUST MUST HAVE USED THE PROPERTY AS A DWELLING FOR AT LEAST SIX (6) CONSECUTIVE MONTHS; AND

2. A CERTIFICATE OF OCCUPANCY (“C of O”) MUST HAVE BEEN ISSUED FOR THE PROPERTY.

The law specifically states it’s the borrower’s responsibility to prove the property was used as a dwelling for 6 consecutive months. Meaning, a lender can sue and it’s the borrower’s burden of proof to prove "consecutive use."

While it appears the “used the property as a dwelling for at least 6 consecutive months” seems open to legal interpretation, lenders will fall back on the intent of the law – which was put in place to help curb walk-aways.

So it appears short sale activity will pick up since a short sale will be the only viable option for somebody considering letting their second/vacation home go back to the bank.
 

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Begining

That is just the tip of the iceberg. More and more laws will be passed to aid the lenders in recovering assets. The lawyers are busy, and the borrowers are not. Just wait until all the repos the "cash for clunkers" program will create....People couldn't afford a new car on their own, but with gov't intervention they got one....See any parallels to the real estate foreclosures after gov't intervention?.......So, look for new laws concerning auto loan defaults coming real soon......"Dealer Recourse" falls into place when the lender returns the vehicle to the dealer within 90 days of loan default.....91 days, the lender owns the vehicle and will take a bath $$$wise when sold off a repo lot..... Ray
 

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We don't need knew laws we just need to go back to making people prove they can afford what they are buying. If your not paying cash and cant prove you have the income to afford something, you don't get it. Very simple, problem solved.
 

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We don't need knew laws we just need to go back to making people prove they can afford what they are buying. If your not paying cash and cant prove you have the income to afford something, you don't get it. Very simple, problem solved.

Going hand in hand with that, shouldn't the lenders bear some of the responsibility for lending to borrowers who really couldn't qualify anyway.

I have an axiom that go's like this:

If you lend someone twenty bucks and never see them again, it was worth it.
 

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Red Blooded American
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We need more accountability and consequence in order to make better society. I've seen people losing their homes put all their appliances on craigslist, yank off the A/C for the aluminum, even strip the copper pipes and wiring out on their way out of a home they couldn't afford. Without a deficiency law like this they will eventually sell the 2x4s and roof tile, besides, every mortgage agreement (deed of trust) has a deficiency agreement clearly spelled out in it. They've just needed better teeth in the agreement in order to enforce it.

I really don't feel sorry for the lenders in this but it's very important that people be held to the agreement they entered into in order to insure an accountable society.
 

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Dreaming of snow
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We need more accountability and consequence in order to make better society. I've seen people losing their homes put all their appliances on craigslist, yank off the A/C for the aluminum, even strip the copper pipes and wiring out on their way out of a home they couldn't afford. Without a deficiency law like this they will eventually sell the 2x4s and roof tile, besides, every mortgage agreement (deed of trust) has a deficiency agreement clearly spelled out in it. They've just needed better teeth in the agreement in order to enforce it.

I really don't feel sorry for the lenders in this but it's very important that people be held to the agreement they entered into in order to insure an accountable society.

Thats nearly impossible to prove though. How do you PROOVE that the borrower took the stuff from the property. In many cases the borrower DID take it, however there are MANY more that exist in which the neighbors take it, or people driving by break in and take it. We own a property management company, and deal with these every day. Weve gone into houses that were perfectly fine, then two weeks later everything is gone. First person to blame is the home owner, but we had already seen the property before and knew that the home owner didnt do it. At what point do they have a cutoff date in which the borrower is responsible for the property? Most dont wait for an eviction date (Ive only had 1 property in which people were there when I had to sign the eviction notice). Also, to what extent are the borrowers responsible for? If the house was appraised based off the property and land, then after the home loan was completed they had a pool put in, that is not a value added item at the time of the appraisal the lender lent off of. So, are they legally able to sell the pool equipment at that time (most commonly thing stolen in the foreclosed houses).
 

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Discussion Starter · #8 · (Edited)
I would guess 90% of us on here could not sustain a household after a somewhat catastrophic car accident or illness. I know I guy who caught West Nile and has lost nearly everything….simply because he was bit by a mosquito and is still disabled.

On that note, I think Cali has it mostly right with their one-action rule and its similarity to bankruptcy protection. Similarly, the new AZ law still protects homeowners in the above-situation.

It would be interesting to see how Havi and other vacation home havens would have weathered this mess if this new law had been passed 3-5 years ago.
 

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Discussion Starter · #9 ·
Thats nearly impossible to prove though. How do you PROOVE that the borrower took the stuff from the property. In many cases the borrower DID take it, however there are MANY more that exist in which the neighbors take it, or people driving by break in and take it. We own a property management company, and deal with these every day. Weve gone into houses that were perfectly fine, then two weeks later everything is gone. First person to blame is the home owner, but we had already seen the property before and knew that the home owner didnt do it. At what point do they have a cutoff date in which the borrower is responsible for the property? Most dont wait for an eviction date (Ive only had 1 property in which people were there when I had to sign the eviction notice). Also, to what extent are the borrowers responsible for? If the house was appraised based off the property and land, then after the home loan was completed they had a pool put in, that is not a value added item at the time of the appraisal the lender lent off of. So, are they legally able to sell the pool equipment at that time (most commonly thing stolen in the foreclosed houses).
Yup, and thus the reason you have a big, fat E/O policy in place.
Tons of liability in REO, up and down the chain. Lotsa "he said, she said" BS.

Soon you will find more and more occupied lockouts as people realize CFK is not such a good idea, and you are locking them out of their primary residence.
 

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C2 - does that law affect current mortgages, or only new mortgages from when the law was created? Seems like they can't change the rules on people who signed up under the new rules. The law seems a little too late.
 

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Discussion Starter · #11 ·
C2 - does that law affect current mortgages, or only new mortgages from when the law was created? Seems like they can't change the rules on people who signed up under the new rules. The law seems a little too late.
I couldn't find any info on that portion of it, I too was curious. I'm not sure they addressed it with the new law and again, relying on the "intent" of the law, sounds like it's effective immdiately on existing mortgages.
 

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The Pool Bitch
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That new law has been on the news a lot out here. The governor said that she signed it into law on the advice of staff, and that now that she understands it, she wants it changed. So, the legislative process is seeing what can be done to change it back.
 

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Going hand in hand with that, shouldn't the lenders bear some of the responsibility for lending to borrowers who really couldn't qualify anyway.

I have an axiom that go's like this:

If you lend someone twenty bucks and never see them again, it was worth it.
The borrowers should read the fine print and they ought to know wheter they can afford the home or not.They are not forced to buy the home or signing papers at gunpoint.

If your total income is 100k you aint going to be affording a second home at a brand new boat with a family.
 

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That new law has been on the news a lot out here. The governor said that she signed it into law on the advice of staff, and that now that she understands it, she wants it changed. So, the legislative process is seeing what can be done to change it back.
After she read it and that now she UNDERSTANDS IT...she wants it changed

Why do i get the feeling this is not going to be the last time we hear this statement from a politician, and especially when it's prolly going to come from more than a few Senate and Congress members with regard to this ridiculous Health Care Bill.....
 

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I got into a forclosure becouse of a premature son being born. I spent 2 months in the hospital sittin next to the lil guy. after we got him home i went to work and pulled myself out of it ( thank god) the funny part is, when i sent them the 15 grand they wanted for a loan modification they lost it roflol. ill be honest here not all lenders are playin right out there its not always the borrowers fault. some times stuff happends ya just have to work it out. most lenders dont want to forclose they want there payments but some people just bail and give up its no fun ill tell you that. they threatened to have us evicted 3 days befor christmas witha very ill newborn boy. BTW he turned 3 this year in january and hes doin good :)plateJumphes a lil ladys man and loves to tease his sisters lol i wonder where he got that:)Unsure
 

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Stihl Kicking
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I got into a forclosure becouse of a premature son being born. I spent 2 months in the hospital sittin next to the lil guy. after we got him home i went to work and pulled myself out of it ( thank god) the funny part is, when i sent them the 15 grand they wanted for a loan modification they lost it roflol. ill be honest here not all lenders are playin right out there its not always the borrowers fault. some times stuff happends ya just have to work it out. most lenders dont want to forclose they want there payments but some people just bail and give up its no fun ill tell you that. they threatened to have us evicted 3 days befor christmas witha very ill newborn boy. BTW he turned 3 this year in january and hes doin good :)plateJumphes a lil ladys man and loves to tease his sisters lol i wonder where he got that:)Unsure
its great to hear you pulled through it and that your son is doing well. i can't speak for everyone but i know for us it wouldn't take much to put us is a bad situation quick.
 

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I couldn't find any info on that portion of it, I too was curious. I'm not sure they addressed it with the new law and again, relying on the "intent" of the law, sounds like it's effective immdiately on existing mortgages.
Well that sounds like a lawyers dream! Isn't that called Ex post facto and a big no-no in the U.S.?
 

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Discussion Starter · #19 ·
Well that sounds like a lawyers dream! Isn't that called Ex post facto and a big no-no in the U.S.?
Nah, the terms of foreclsoure are still in the note itself. Collection laws change all the time, it only changes the ability and manner to collect.

As Phebus points out, it was big news out there and in AZ; I was surprised nobody posted anything about it.

Cdog must be vacationing with Obama and too busy to have posted it up. :p
 

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The borrowers should read the fine print and they ought to know wheter they can afford the home or not.They are not forced to buy the home or signing papers at gunpoint.

If your total income is 100k you aint going to be affording a second home at a brand new boat with a family.

Nor were lenders at gun point to lend, the fact is lenders collect up front fees at the time the loan is enacted and feel that they can foreclose if the loan go's bad and recover their costs. Surprise, that's not the case now with the foreclosure market being what it currently is and that is why lenders have stopped lending. Lenders are BIG business and if they can't make big profits from borrowers their just not very interested any longer.
 
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