ARTICLES & NEWS

FORECLOSURE & SHORT SALES ARTICLES

Carryback loan on land

Weighing Options for Seller with Carryback Loan on Land

By Christopher Combs | February 28, 2021

Question: In one of your columns a buyer had purchased forty acres of land in northern Arizona (“Forty Acres”) with financing for the purchase of this Forty Acres by a seller-carryback $200,000 five-year mortgage loan. After five years, however, there had been none of the anticipated development in the area, and the Forty Acres was only worth $100,000. In your column you said that the seller could choose not to foreclose on the Forty Acres, but could file a lawsuit against the buyer for the failure to pay the $200,000 promissory note. In my opinion, however, after the seller sues…

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open land

Mortgage Lender Generally has the Right to Either Foreclose or Sue

By Christopher Combs | November 15, 2020

Question: We bought forty acres of land in Coconino County five years ago for $200,000. We made a $20,000 cash down payment, and the seller did seller carryback financing of $180,000, plus ten percent interest, all due in five years. Although the forty acres of land in Coconino County was to be part of a large development of homes, five years later the forty acres of land is basically worthless. We have tried several times to negotiate the balloon payment of $180,000 with the seller. The seller has refused to negotiate with us, and now has filed a lawsuit against…

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Foreclosure auction

Foreclosure Proceeds After HOA Foreclosure

By Christopher Combs | September 6, 2020

Question: Thank you for your recent column on the right of an HOA to foreclose on a home for nonpayment of $3,000 in delinquent HOA dues. In your example the house was owned free and clear, and was valued at $185,000. My question is, after the foreclosure sale, would the HOA get the entire $185,000 foreclosure sale proceeds, or would the HOA only get the $3,000 delinquent HOA dues, and the homeowner would get the remaining $182,000? Answer: There are sophisticated investors who daily look at foreclosure notices that schedule foreclosures of homes. These investors then compare the value of…

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Mortgage repayment failure

Statute of Limitations for HELOCs

By Christopher Combs | July 26, 2020

Question: When we bought our Chandler home in 2006, we got a 30-year first mortgage with Bank of America, and a Wells Fargo $100,000 second mortgage home equity line of credit (“Wells Fargo HELOC”). We used this $100,000 for a swimming pool and for landscaping in our back yard. In 2011 we both lost our jobs and we had financial difficulties. Although we were able to keep our first Bank of America mortgage current, we stopped paying our Wells Fargo HELOC. Last week we received a letter from an attorney that our Wells Fargo HELOC balance is $160,000, and that…

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foreclosure

HOA Can Foreclose on Home for Unpaid Dues

By Christopher Combs | May 24, 2020

Question: Our mother has been struggling with dementia that has worsened over the last year. We recently moved her from her Mesa home to an assisted living facility in Gilbert. The Mesa home is both a physical disaster (with numerous repairs necessary) and an HOA paperwork disaster. The HOA dues total more than $3,000, and have not been paid by my mother for over a year. In addition, there are numerous unpaid HOA fines of more than $2,000 for overnight parking in the street and for not making repairs to the exterior of the home. The HOA’s management company has…

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Construction loan

“Walking Away” From Construction Disaster

By Christopher Combs | February 23, 2020

Question: In 2016 we bought a lot for $40,000 in Camp Verde to build a summer home. Last summer we got a construction loan for $280,000. This $280,000 construction loan was secured by the lot and by the home to be constructed on the lot. During construction of the home, however, heavy rains caused the foundation to sink and the partially built home to collapse. Almost all of the $280,000 loan had been used for the construction of the home. Our contractor has no insurance and our insurance company has denied coverage because we didn’t go to Camp Verde to…

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Foreclosure For Sale

Partial Payment Doesn’t Cancel Foreclosure

By Christopher Combs | September 8, 2019

Question: After our parents passed away two years ago, my sister and I became the owners of their home in Sunnyslope worth $280,000. My sister wanted to live in the home, so I deeded the home to her in exchange for her giving me a five-year $140,000 mortgage on the home. In addition to the monthly mortgage payments, my sister was to pay the property taxes and the homeowner’s insurance. My sister has never made one mortgage payment to me, and I have been paying the property taxes and the homeowner’s insurance. I finally hired an attorney to do a…

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auction

Bidding at a Trustee’s Sale

By Christopher Combs | August 4, 2019

Question: Two years ago we loaned my wife’s sister $70,000 to buy a small home in Glendale. The $70,000 loan was secured by a $70,000 promissory note and a deed of trust on the home. My wife’s sister never made one monthly mortgage payment to us, and she moved back to Iowa a few months ago. She has refused to sign a deed to us because she eventually wants to come back to Arizona. We started foreclosure proceedings with the title company that drafted the original paperwork, and a foreclosure sale is scheduled next month. What do we need to…

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