New law makes homeowners liable in foreclosure

[GilbertMom]

Originally Posted by Boompa

I don't see it that way, it doesn't apply to your primary residence. People who walked away from a home should know better. Who took the brunt of your actions, or do you care. When you dumped your house it became one of those "Toxic Assets" that destroyed the economy

It CAN apply to your primary home as it only applies to single family residences and duplexes. The stipulation is that you must have live in the home CONTINUOUSLY for the previous six months. If the bank kicks you out and forecloses after you and your family have moved out, they will go after the money. The reason this law was not previously written is because it was commonly accepted law that the bank is accepted the mortgaged property as collateral for the loan, so whatever they get from that collateral fulfills the contract. At least that is my understanding.

[GilbertMom]

Originally Posted by poolgirl51

I don't know how folks sleep at night when they do such things. A contact is a contract and to default when you can afford to pay is immoral and we all end up paying the bill. I am upside down on my house but I would never ever walk away!! I will sit it out until the market turns and if it doesn't then it is just the risk that I took. I bought my home to live in and that is exactly what I will do. Sorry I don't mean to rant but my home value continues to slide because of sleazy individuals who walk away when they can afford to pay and it just pisses me off big time.

In case you aren't aware, it was not individuals as much as individuals hiding behind LLCs who held much of the bad money mortgages in this state and just walkedaway without any repercussions. They did collect the mortgage money from renters, put it in their pockets, defaulted on the loans and filed bankruptcy for their LLC. Then they just created another LLC to do the same thing. We have to take away the "rights of citizenship" of corporations if we the people are to maintain our rights.

[Ponderosa]

Originally Posted by GilbertMom

It CAN apply to your primary home as it only applies to single family residences and duplexes. The stipulation is that you must have live in the home CONTINUOUSLY for the previous six months. If the bank kicks you out and forecloses after you and your family have moved out, they will go after the money. The reason this law was not previously written is because it was commonly accepted law that the bank is accepted the mortgaged property as collateral for the loan, so whatever they get from that collateral fulfills the contract. At least that is my understanding.

That is not what the amendment says. It says it must have been USED by the trustor as a single or two family residence for a period of six consecutive months (nothing about immediately preceding). It's vague - what is "used"? For sure it means that if you lived in the house with your family for any six consecutive months then the old rules apply. Anyway, it is repealed in the budget law if that is ever signed.

I agree with you. Banks knew the risk or should have when they offered the loan at the interest and terms they did. They should not be allowed to change the rules after the fact. I hope the people of Prescott throw the bank tool who wrote this amendment out of office next election. Even he admits it was bad legislation and sponsored the repeal.

[jco]

Bumping for update. Does anyone know where this stands? Was there ever clarification on the six months residence rule? We lived in our home for 15 straight months, but haven't lived there in 20 months. If we foreclose, are we liable for the difference?

[Howard Roark]

I lost 20% value of my house. I did not walk away. I did the right thing and paid the difference between what I owed and what I sold the house for.

This is why I am 100% against any subsidy to any stuck buyer. They did not whine when the prices ran up did they? They did not offer to share their profits if they sold at the right time, did they?

Suffer, stuck greed-heads.

Originally Posted by poolgirl51

I don't know how folks sleep at night when they do such things. A contact is a contract and to default when you can afford to pay is immoral and we all end up paying the bill. I am upside down on my house but I would never ever walk away!! I will sit it out until the market turns and if it doesn't then it is just the risk that I took. I bought my home to live in and that is exactly what I will do. Sorry I don't mean to rant but my home value continues to slide because of sleazy individuals who walk away when they can afford to pay and it just pisses me off big time.

[MotleyCrew]

Originally Posted by Howard Roark

I lost 20% value of my house. I did not walk away. I did the right thing and paid the difference between what I owed and what I sold the house for.

This is why I am 100% against any subsidy to any stuck buyer. They did not whine when the prices ran up did they? They did not offer to share their profits if they sold at the right time, did they?

Suffer, stuck greed-heads.

We had a hard time understanding the people who just walked from homes that were underwater and they were able to make the payments. This has happened to us twice in 30 years and we never walked and just waited until the market improved. Always made money on most of our homes, or broke even. I blame the media to some extent and recall them chanting over and over "they owe more than the house is worth." Like it was some kind of fatal disease.