When other options have failed or are not attractive to a borrower, a strategic default may be the best option in an otherwise difficult situation. Some buyer's simply cannot afford to pay their mortgage as a result of a job loss or other economic hardship. Other borrowers are faced with a job relocation or need to sell their property, but because it is underwater, can't do so without their lender's assistance. Other borrowers simply recognize that the value of their home compared to the debt owed to their lender is so low that continuing to pay their mortgage is financial suicide. For those borrowers that decide to allow their home to go into foreclosure (a "strategic default"), Arizona's anti-deficiency laws may protect the borrower from additional liability to their lender and limit the lender's rights to selling the property through foreclosure.
In deciding if strategic default is an option, a borrower must understand:
- Whether Arizona law will protect them from additional liability to their lenders after a foreclosure.
- What obligations they have to continue maintaining their property.
- Their obligations regarding homeowner's association fees, real property taxes and insurance.
- How long the foreclosure process takes and what to expect leading up to and through the foreclosure sale.
- The impact to a borrower's credit and other loans.
- Their rights and obligations related to occupying the property after a foreclosure.
- Potential tax implications from a foreclosure.
A strategic default is a major decision for any borrower and should not be made without first understanding all implications. McCain & Bursh, PLC can review your loans and your specific situation and advise you regarding your rights and obligations and what to expect in the foreclosure process. Don't go through this process alone - having experienced foreclosure attorneys at your side will ensure that you are making a wise decision and help ease the stress and uncertainty that accompanies a foreclosure.
Please Contact Us today or call us at 602-281-6521 to understand how McCain & Bursh, PLC may be able to assist you in deciding if a strategic default is an option for you.
