80/20 in AZ

[robabeatle]

I am freaking out now. I am late on my mortgage, planned to walk away. But now I am reading that since my loan is an 80/20 (no refi ever no equity loan taken out) that the bank will come after me for the second. Is this a fact?

[robabeatle]

This property is less than 2.5 acres, single family dwelling.
The 80/20 was the original loan (30 year fixed), never refi-ed.
I think I am okay, anyone know?

[dm415]

Was this a discharged 80/20,nonreaffirmed,I assume if your walking then you have no equity in home,the second mortage (20) part isnt gonna do anything.I bought my home in 06 with an 80/20.After my 7 discharge I stopped paying the 2nd for over a year,they never called once,they sent a nod letter,which means nothing other than you are in default and we know it.8 months after that letter I offered them 10% cash settlement to release the 2nd lein,they never really responded,anyway I am now in the process of settling 2nd mortage.BUT if your walking from house then walk live there for who nows how long a year maybe more without making any payments.

[HHM]

If you haven't filed bankruptcy, then yes, the 2nd mortgage may come after you for the difference.

[robabeatle]

I am not filing bankruptcy. There is mortgage insurance paid to date. I am reading that since the second is used for the home, not to upgrade or anything else but strictly purchase monies, then the AZ anti deficiency laws does not allow them to come after me on the second.

HMH you are stating otherwise. Can you point to a source for this information?
Is this source not accurate?

http://www.folksoconnor.com/financial/mortgage-deficiency.htm

[despritfreya]

The OP will not have exposure if the 1st forecloses. In Arizona, if the lender split the PMSI loan to make the deal work (80/20, 70/30 etc) and the residential property is 2.5 acres or less, then the 2nd is non recourse after the 1st forecloses and visa-versa.

[robabeatle]

I am thinking of taking the mortgage papers to a lawyer just to have peace of mind but that will cost a few hundred which I am trying to save.
Anyone here actually go through this situation in AZ?

[despritfreya]

Larry's web site is correct. If you have any questions call his office. While they represent lenders I don't think Larry or his staff will refuse to answer a simple question.