AZ New Law, You must pay bank difference if you foreclose

reply to post by LatentElement


But yet we still have those that would rather punish the little guy who understood nothing but the chance to have the American dream (in most cases) and see them lose everything. Meanwhile the corporate bigwigs who knew exactly what they were doing not only recoop their losses through us (while enjoying their stay at luxury resorts on our dime), but also recoop even more from the little guy that looses everything :shk:

Funny how the bankers always seem to make out like the proverbial bandit.

Thanks for the Cheech and Chong i needed a laugh right about now.

And thanks for explaining it way better than i ever could

The banking industry is what started us on this road of sorrows

No.

What started us down this road was our greed. We readily accepted all that easy credit. We believed the hype of "home ownership" We happily agreed with big business that unions were bad for us. We wallowed in consumerism.

We must reap what we have sown for the last few decades.

Maybe one day we will understand that wealth has nothing to do with happiness, but I doubt it.

In the meantime it's easy to blame the banks, the brokers, the stockmarket, corporations, Obama, the Labour party - Pick your favourite villain.

Originally posted by The_Seeker

Originally posted by mooseinhisglory
Kick you out and make you pay for it?
Doesn't make sense. That is meeeessed up. Chalk that up as another crappy authoritarian law for AZ. I hate that place.

Well I am sorry, but that is the way it should be. If you cant afford to buy the house in the first place, EVEN IF THE BANKS GAVE YOU THE MONEY, then be it on your head.
You dont buy something you cant afford then walk away from the payments. That really stuffs with the rest of those people that CAN afford to buy a house.
They up all the interest rates, and those that walked away from those houses, get off scott free... NO WAY ... You brought the house, you finish paying for it (well the difference anyways).

Let me ask you a simple question are you an employee of a bank? Maybe at the instance a person decided to purchase a home they were financially capable of affording the property, but change in circumstance, such as; debilitating illness or lengthy unemployment changed that plan? An average fixed rate mortgage of 30 years is a long time and anything can happen in that period that defies all rational thought. Plus, no one is buying homes like they were before this fiasco and so a person behind the eight-ball can't get out from under before it's to late. In most cases, the person would love to continue paying and stay in their homes but crazy stuff is going on right now. With the economy getting worse and joblessness increasing everyday, foreclosure is going to continue and is already creeping into fixed rate-mortgages which is the bank's bread and butter.

It's too bad there is not enough stakes or holy water for the vampires we know as the bank. These beasts will suck you clean without batting an eye. I would advise anyone to just hold off falling on that whole American dream facade, because lately; it has become an American nightmare. Never invite a vampire into your house, you fool, it renders you powerless. The banks are supposed to be professionals in lending and finance, and it is their fault that they are taking losses, because they should have meticulously went over every loan application and sat down with mortgagee on a face to face basis to discuss their finances.

If the little guy built up any equity the bank takes that, as well as, the property. So it is a win win for the bank but a complete and utter loss for the borrower. Cool it, with your callousness, because you never know; one day you may be rock bottom like these poor unfortunate borrowers.



[edit on 28-7-2009 by Jakes51]

Originally posted by ravenshadow13
That's so wrong. If you get foreclosed, it's because you don't have enough money to may your mortgage or for other financial reasons like that. It's not like you have all this extra money to give to the bank.

Well to be fair, this has always been the case to a degree. The difference is that if you get foreclosed on, the money you didn't pay back becomes taxable income.

That is a huge difference from owing the bank money though.

Seems like the banks are really usurping the gov here.

I bet a lot of bank employees upgrade their housing in the next year or two.

When will the idiot american realize that owing a home is an enormous gamble?. The morons have been told all their lives home-ownership is the american way and they blindly accepted that and now they're gettting screwed every way but right side up.

NEVER BUY ANYTHING ON CREDIT. Problem solved.

Originally posted by Make Speed Limit 45
When will the idiot american realize that owing a home is an enormous gamble?. The morons have been told all their lives home-ownership is the american way and they blindly accepted that and now they're gettting screwed every way but right side up.

NEVER BUY ANYTHING ON CREDIT. Problem solved.

That's a fine solution and I for one agree that credit is the rake. However, since incomes have been stagnant since the 70's people can't afford to buy a decent home on their own. Look at some of the shacks in your local real estate magazines, and the horrendous prices being quoted, it is ridiculous!

I am fumed at the way things have gone with pricing and how wages have remained modest for the average working American for so long. Yet, I see some of these houses and the size of some of them and I am dumbfounded at the prices. Do they think everyone is either a hotshot doctor or lawyer. It is insane, and with these bailouts, they just prolonged this inflationary insanity that much longer.

My grandfather told me that after the war when the guys were returning home all one needed was a decent down payment and a steady full time job to live quite reasonably in a home, but now that expense is almost impossible. However, I am in agreement with you that credit should be avoided at all costs especially with the recent chain of events we are all experiencing. I don't even have credit cards and I probably never will. If I don't have the money then I do with out. Screw keeping up with the Jones! All one needs is an income, four walls and a roof, cloths on their backs, and a warm meal to survive.

OK, so I live in Phoenix, and have to say that this is a great idea! Here is why. We have a lot of greedy people here that came in the area about 3-5 years ago to invest in housing...now, investing in housing is not a bad idea.

Here is the killer. When they housing market crashed, many of them just walked away from their houses !!!! This caused the market to crash even more, and in the end, AZ was one of the hardest hit areas. And that was because you could walk away from a home and just take a credit hit. If you have money in the bank, what do you need credit for?

Now, someone like me, who pays their mortgage on time each month is getting killed because the house that I bought for 214k is not selling for 85k because of the jerks that caused this.

So, I am all for it. The greedy people that think they are going to get rich quick with a house deserve to pay all the money back. Show a sign of responsibility for once and actually live up to your side of the bargain!

Now, for the people that truly cannot afford the house any more because they lost a job, I feel for you. It sucks. But the people who over bought or invested in hopes to make money, you just got what was coming to you!

Oh I know. Here in Arizona your are buying a piece of desert with a box on it that looks like everyone elses box, ( generalizing) then you pay an arm and a leg.

I do not see how anyone could be on the bankers side. Someone looses their job, and now they have to have their wages garnished?

This law is going to make people afraid to rent their homes! You will see home rental prices sky rocket! Someone loose their job and now has judgment for 100k on their credit, is ruined for life! They will be paying this off or forced to work under the table, will never have credit again. Most jobs now check your credit report before hire. So this guy probably will not be able to land a good job again away , to worry about paying it back. So he is now homeless jobless, with no hope but to work under the table, and good luck there.

What happened to free market? Investor or private buyer? So what.
The banks do not have money to lend in the first place. They created it when the loan was taken.

Now they are no longer loaning and creating that money. Bail out money sits in the fed earning interest. Meanwhile they destroy someones life, to get that money.

Investors are the start of what turns a market around. I am not talking about what we saw a few years ago, but in general. We are seeing it now. They are
buying homes now, at the current low prices. They start and the regular home buyers follow.

So what you are doing is taking away the investor. The regular home buyer had better plan on being in that home the next 30 years, not renting out etc, or planning to move, or they may be paying the bank, so there goes your personal home buyers too.

You think it is bad now? This is tumble it!!! The banks do not care, as they are no longer loaning out anyway!! This is just icing as another poster said.

The bank did not have to give the investor the loan anyway. Where is their part? They loaned them in a high market, when most knew the bubble would pop, but they did not care. The bank needs more common sense. We need laws that give the bank common sense in lending, if you want to make laws.
Where is the bank "Czar" that oversees who THEY are lending to?

Throws all my cards on the floor. 52 card pick up anyone?

Did anyone even bother to read the article? It states:

"Under the new law, a homeowner must live in a house for six consecutive months to establish residency and to be covered by the anti-deficiency law.

Homeowners who lose a home to foreclosure, and who fail to meet the six-month residency requirement, will be liable for the difference between the foreclosure sale price and the original loan.

For example, if a lender forecloses on a home with a $400,000 mortgage balance and can only resell the home for $200,000, then the borrower still will owe the lender $200,000."

It appears that if you live in the house for more then 6 months, then this does not apply? If so, then what are you all crying about? I am sure most of you have lived in your house more then 6 months.

reply to post by MarshMallow_Snake


I live here too, and I know what happened. My house is worth half what I paid.
I have not walked out. I could afford the home I bought when I bought it.
I bought smart, and even still would cost me more to rent than my mortgage does.

The answer is not this law, but for the banks to be more strict when selling to investors. Maybe make in a collateral loan for investors.

reply to post by MarshMallow_Snake


There are also a lot of seasonal people here that do not have residence.
What about them? To many holes. Or what about renters, as I stated earlier.
A lot of people rent their home for many reasons. They are not all investors.
So the renter defaults, and now you have to pay the bank back.
They need to fill in all these holes.

I am surprised this has to be changed. Everywhere that I have ever lived, the law was already this way! If you borrow $200K, you owe $200K, if they foreclose and net $150K when they auction your home. You still owe $50K!

The same goes for vehicle repossessions.

The home or car is security for a loan. You owe the whole amount of the loan regardless. That is why these 100% and 125% loans were so risky for the banks, and now we are all suffering from bad investment decisions from companies "too big to fail"!!

It just means that people who are losing their homes to foreclosure will also have to go bankrupt at the same time.

You can't get blood from a turnip and you can't get money from people who don't have any.

I guess it's intended for people who have assets but are letting their home that they are upside down on go.

I don't know what percentage of the population that is being foreclosed upon still have assets.

reply to post by ANNED


Bingo!!!!! that is what you get when a state priorities no longer are to support the people that get their officials elected.

The priorities goes to the highest bider, in this instance the whores in government were bought by the pimps in the banking system.

Crocks buying out crocks, but is OK, America the great, where everybody with influences over your political leaders get the VIP treatment.

[edit on 28-7-2009 by marg6043]

reply to post by Wildbob77


Terrible deal for people, just to find out that they are slave to the banking system no matter what.

reply to post by MarshMallow_Snake


Yes, I read the whole article. And also read other news accounts of the passing of this law:
Daily Mail

And this one is particularly interesting as well as informative:
Phoenix New Times

It is not just that some folks live here seasonally, but the fact that the banking industry pushed this through the State Legislature near the end of it's session, and I quote -

The amendment was tacked as a striker to an entirely unrelated bill dealing with the criminal justice system.

It was not even introduced in the finance committee, but added to an " unrelated bill" which means those in the House who would have made it a point to oppose this bill, or at least, if given time, research it, were not informed it was being presented to to the floor and probably were not present for the vote.
Yes, that happens all time in the State house.
I can't find it, but there is a video showing State Reps pushing the voting buttons of absentee Representatives (Not present) on the desks next to theirs. (There are Yea and Nea buttons one each Reps desk so the can cast their vote for or against)
It was on the ABC15 news site ... I think.
Does anyone remember seeing that one?
Anyway ... the point is the introduction was done in an underhanded manner.
So, tell me ... Do you still think, given how the bill was introduced, that it was done with good and honorable intentions?

To my respected friend chise61 - Thanks for the acknowledgment. And glad the C&C quote left ya grinnin'!

reply to post by MarshMallow_Snake


The problem is the big investors that were in on it from the beginning with the banks making money hand over fist doing nothing but flipping houses won't even be touched by this new law. They made enough money in the beginning so that they were able to just walk away and take their minor losses when the bottom dropped out. Sure they will take a credit hit for the next seven years, but it doesn't really effect the credit they have now as long as the keep current with their payments, and they can afford to ride it out. They and the bankers knew what they were doing, they knew the bottom was gonna drop and when they saw the signs they got out, while joe blow who didn't know, and couldn't get out looses everything.

As far as this law not effecting those that have lived in their houses for six months. There are many that could afford their houses when they first purchased them, but due to unforseen factors such as lost jobs, paycuts, medical issues, etc, were unable to handle the morgtage payment any longer. Many of these people trying to be responsible for their debt moved out of their homes and found renters so that they could meet the morgtage, believe me there are quite a few cases like this. Then the renters lost their jobs and had to move. While trying to find new renters the bank forecloses and since they haven't lived there for six months this new law now effects them, while big banks and big investors keep walkin away with that chesire cat grin plastered on their faces.

reply to post by LatentElement


My son told me about that video awhile ago, he was fuming over it. I'll ask him if he knows where to find it. It's a shame that they can't even be trusted not to cast fraudulent votes, and is allowed to continue.

Of course the total mortgage is due even if the house is foreclosed on or sold for less, but part of the stimulus money was given to banks with the encouragement to work with homeowners who are upside down on their investment in order to come to an equitable solution that can save the home. Unfortunately this is not at all happening to the degree that it has been encouraged, and passing this law at such a time seems more than a little suspicious.