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Buying a home after foreclosure?

Phoenix, AZ |

We are in Arizona. Our house went into foreclosure in Mar 2010. At that time we have two loans 1st loan is 5/1 arm and second one is balloon loan schedule to pay in 30 years. It's a purchased money and it satisfies Arizona anti-deficiency, two loans were taken at same time in 2006 (no refinance after that) and all the money went into purchase of the home( no cash out). We got 1099 C from both lenders and we filed taxes with no issues. Currently we are renting a home. After learning from our mistakes we have saved and borrowed some money(personal loan) from family to buy home with cash since no lender will give loan for us now. Is the first or second lender still can come back on us or they can keep any kind of lien on new house? Anyone’s help is much appreciated.

Regards,
Rose.

Thanks a lot Robert, It is less than 2.5 acres of land or less, 1 or 2 family dwelling (single family) and I forgot to tell it is our primary resident. I appreciate your help. Regards, Rose.

Attorney Answers 3


  1. Best answer

    Assuming the home you lost in 2010 qualified for anti-deficency protection (2.5 acres of land or less, 1 or 2 family dwelling), and both loans were purchase money, then the former lenders may not pursue any other asset other than the collateral, i.e., the former house lost to foreclosure. The new home will be perfectly safe from them.

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  2. speak to a lawyer. if there is no deficiency then neither lender has recourse. if there is homestead then neither may have recourse either. after speaking to a lawyer you will be able have your questions answered

    without a detailed review by a lawyer can all the issues raised in your question be appropriately addressed...nothing in this response should be construed as establishing a lawyer client relationship..the answers herein are for informational purposes and not to be construed as advice


  3. Based upon the information you provided, it does appear that the anti-deficiency law would be applicable to your previous home. If that is true, then you have no risk of any part of that old transaction attaching to a newly purchased home. The 1099C is further indicative that you are on the right path. Normally, the 1099C is only issued if the loan truly has been forgiven. That may not always be true, but combined with your other facts it surely points in that direction.

    Douglas Edmunds is in the business of helping people and companies file for bankruptcy protection. The bankruptcy code requires that I call my firm a "debt relief agency." Any answers or information provided is for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the legal issues. This is not intended to create a attorney-client relationship. Each individual's situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state for specific information.

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