My question is regarding foreclosure as it relates to a 2nd mortgage in Arizona. Iím getting conflicting information and Iím hoping that someone with experience in AZ foreclosures can help answer my question.
Some background info. Iíve lost my job and Iím trying not to file bankruptcy because prior to our marriage my wife filed a personal bankruptcy (just over 8 years ago) and she is adamantly against going through it a second time. If we walk away from the house we may be able to pay off the unsecured debt. The house was purchased well before our marriage and the 2nd mortgage was also taken out prior to the marriage. Iím upside down in the house about $91K. I owe $178K on the first and $45K on the second and the house is worth approx $132K according to Zillow.com. Iíve tried to get a loan mod but I donít make enough to qualify.
Assuming Iím not planning on filing bankruptcy, can the bank holding the second mortgage come after me or my wife to collect (she is not on the deed or either loan)?
Iíve been told that they can come after me if the 2nd is a home equity loan (not line of credit). Iíve been told that they cannot if it was part of the original purchase (like an 80/20 loan) and Iíve also been told that because AZ is a no deficiency state that they cannot try to collect at all.
Also, Iíve been told that they can send it to collections or try to take me to court to sue for it but that if they do they would lose because of the ďno deficiencyĒ laws in AZ.
So is there a definitive answer as to whether or not they can come after me and if so, can they collect?
Thanks in advance for any insights or information you can offer.