Arizona foreclosure on a VA Loan?
Michelle H asked:
My husband and I will probably foreclose on our house. We can’t sell because Arizona real estate is just awful and the house isn’t worth what we purchased it for. We bought for 350,000$ and it is nowhere near that in value right now. What will happen when we foreclose on the property? Does the bank buy it back for what it’s worth? If they do, what happens to the rest of the money to make up the loan amount? If we foreclose do we need a lawyer?
My husband and I will probably foreclose on our house. We can’t sell because Arizona real estate is just awful and the house isn’t worth what we purchased it for. We bought for 350,000$ and it is nowhere near that in value right now. What will happen when we foreclose on the property? Does the bank buy it back for what it’s worth? If they do, what happens to the rest of the money to make up the loan amount? If we foreclose do we need a lawyer?
Thanks for any help, we greatly appreciate it.
3 Responses on Arizona foreclosure on a VA Loan?
The bank will try to get as much as they can for it. It may not be what you paid for it. The good news is that if it is your primary residence, you wont be hit with a taxable event from the IRS. That loss in most cases would be considered income. This article on Foreclosures may give your more of what you are looking for;
It depends, different laws in different states. But the bank essentially buy the house back at the sherriffs sale / auction.
They will eventually sell the home again to recoup their losses and typically (state by state laws )you will still owe the difference from what they sell for and what your mortgage balance was plus fees & penalties. Yes you should consult an attorney to help you through the process!
Read this article. Very helpful. You can’t just walk away.
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