questions & answers

Question: My home was foreclosed (sold at auction) in 2009. I had two loans on the home, my primary residence: a Primary and a Home Equity Line of Credit. I have become aware that the HELOC bank, *****, has not written off my loan yet; this is preventing me from purchasing another home, which I have under contract. Q: Should a HELOC be considered "settled" with a foreclosure or can ***** the bank still pursue me for the unpaid loan amount (+$100K)? I am waiting to hear from *****, but they are extremely slow to respond and this could cause me to lose a potential new home! :-(

Answer:

HELOCs may not be protected by Arizona's anti-deficiency statutes, those statutes generally protect the borrower from paying back a balance on a loan if the loan was for the purchase of the home.  (See Anti-Deficiency Article on AZLawHelp)  However, anyone dealing with foreclosure related issues should consult with an attorney for specific advice.  Arizona's legal aid agencies may be able to counsel individuals dealing with foreclosure related issues.

Individuals faced with loss of a home through foreclosure/trustee sale or dealing with issues related to a foreclosure can apply for free and reduced fee legal services through the Access to Justice Online Intake System, the link is also available on the top right of AZLawHelp under the “LegalLEARN” section. Individuals may also contact legal aid directly, however due to high call volume there may be long wait times on the phone and the phone system may disconnect calls when overwhelmed. To find the legal aid agency serving a particular county in Arizona, select the desired county in the drop-down under the section titled “FIND FREE LEGAL HELP” on the right column of AZLawHelp..