You have several options, none of them are all that good however. I am hearing that many lenders aren't working with borrowers until they fall behind on their payments, but you can continue to check and also stay apprised of any state or federal assistance plans. If you miss payments, this will affect your credit. if you fall behind enough, the lender can start foreclosure. you can attemp to sell the property via a short sale, but you'd usually need to get the property listed, find a buyer and then submit the short sale proposal to the lender for approval. This can be time consuming and there is no guarantee you'll find a buyer and get lender approval.
Regarding foreclosure, Arizona is what is generally referred to as an anti-deficiency state when referring to foreclosure of residential mortgages. Two statutes apply and the outcome can vary depending on the circumstances. However, as a general rule, if you own a typical residential dwelling and got a loan to buy your home, if the lender forecloses on the loan, you won’t be liable for any deficiency if the sale price doesn’t satisfy your lender’s debt. Here are some general facts and rules that will provide guidance in most foreclosure situations. However, facts matter and the outcome can vary (especially with respect to HELOC's or other2nd position lenders) so consult an attorney to review your particular facts and loan documents before making a decision.
1. A real property loan is typically secured by a Mortgage or Deed of Trust. A Mortgage is foreclosed judicially by filing a court action per A.R.S. § 33-721 et. seq. A Deed of Trust is foreclosed non-judicially via a trustee's sale per A.R.S. § 33-801 et. seq. However, a Deed of Trust may also be foreclosed judicially as a Mortgage.
2. In judicial foreclosures and trustee’s sales, the type of property is key, not the type of borrower. Anti-deficiency rules apply only if the property foreclosed is 2½ acres or less and used for a single 1-family or single 2-family dwelling. Commercial properties don’t qualify nor do loans secured by residential homes being developed for sale but never used as dwellings.
3. If the property passes the test in #2, next determine if the loan is a purchase money (“PM”) or non-purchase money (“NPM”) loan. A PM loan is (a) any carry-back loan given upon buying a property, or (b) any loan used for all or part of the purchase price of a home. A home equity line of credit may be a PM loan if given to pay the price of the home. A PM loan doesn’t lose its PM nature when it is refinanced.
4. In a judicial foreclosure, only a PM lender on qualifying property is prevented from seeking a deficiency; NPM lenders are not — they can obtain a deficiency.
5. In a trustee’s sale, both PM and NPM lenders on qualifying property are prevented from seeking a deficiency. The borrower will not be subject to further liability for the loan.
6. If a 1st position PM lender forecloses via trustee's sale, a 2nd position NPM lender does not lose its right to sue a borrower on the loan. Unless the 2nd position NPM lender is paid or settles the debt, a bankruptcy filing would be required to discharge the 2nd position NPM lender's loan.