Every jurisdiction has a body of laws that governs all aspects of real estate, and Arizona is no different. Its real estate laws, rules and regulations have been in place for decades, and given the number of home loan modifications in Arizona that are being sought, many are wondering how or if these laws apply to that desire.
Below is a brief overview of how the real estate laws in Arizona affect home loan modification, but if you’d like to obtain individual answers to your questions as they pertain specifically to your situation, contact the attorneys at Phillips & Associates today to schedule an initial consultation.
In general, real estate law is governed by the law of contracts, as these transactions tend to be executed in accordance with those standards. A few examples appear below:
Short sale – The short sale is becoming more prevalent these days given the number of mortgages that are in or near default. If a mortgage goes unpaid, the lender has the right to foreclose on the property and retake it. However, this is not seen as a positive option by the lender most times, as that means they’ll need to sell off the property, often at a loss. A short sale is an agreement between the lender and borrower that allows the borrower to pay less than the full amount owed in a lump sum and have the rest forgiven. This is usually only possible if the borrower sells the property for less than the loan amount. When this happens, there could be issues with property taxes in the near future, and you may need those questions answered before making a tax mistake.
Sale timeframe on a foreclosure – If a lender retakes a property and evicts the borrowers, that lender has the right to sell that property via auction. However, specific notice and time rules must be followed, and until such time as the auction occurs, only the borrower and/or junior lien holder can pay off the delinquent amount and remove the home from foreclosure. Any transaction that does not fall within this legally required timeframe could be voided if challenged.