The trend today for many is to opt for Arizona foreclosure properties before looking at anything else, but new laws are resulting in thousands of litigation's that are leaving many destitute and without a clear deed to the property they thought they were buying. With passage of Senate Bill 1721 in July 2009 and a revision enacted in September, many are finding themselves facing years of lawsuits and appeals in the hopes of straightening out the whole mess.
When the Senate bill was passed it was found there was so much confusion and so many loopholes that few could figure out what it really all meant or how it was going to work. The revision was suppose to clarify the law but, in fact, has packed the courts with lawsuits that are leaving many destitute and without options. Additionally, since changes will be many years coming, new buyers of these properties are having second thoughts and for good reason.
Those promoting revision claimed that the current law was designed to protect those reselling a foreclosed home, such as a bank, from loosing money on the deal and making it harder to foreclose in the first place. However, the result was an interpretation of the law that allowed lenders to file a deficiency judgment against the property if the sale price was less than the debt owed. This addition not only left the former owners unprotected, but also placed a lien against the property so new owners were unable to resell until the old debt was resolved.
Those who buy in this area to become snowbirds may find they have bitten off more than they can chew as there is also a residency clause included. What it states is that anyone absent from their property for 30 days or more, who have missed even one payment, can return home to find their possessions and property sold in order to repay the mortgage. And, if sufficient funds are not collected, the former homeowners are held responsible for the difference. This also includes cases of extended hospitalization. We can all agree that lenders have been coming out on the short-end of the stick in the foreclosure market, but one must ask, is the law fair? Only the courts can decide.
There are many issues associated with the new law that will take many years to sort out in appeals court. It is here that new laws receive interpretation, but so many judicial actions are now underway they may never sort it all out. The end result could be a repeal of the law that leaves lenders in financial straits, old owners permanently losing their property, and new owners not knowing where they stand. Eventually, new owners may find they have spent a ton of money and have nothing to show for it in the end.
Many fear the results of a repeal of the law, if it is deemed unconstitutional, since it may leave them in a far worse situation than they are currently in. New buyers may find they are in the worse position of all having bought a home that includes a lien for more than the value of the property and finding they may have to return it to the former owners in the end anyway without compensation. One example of how complex this can be is that it is unclear whether the lien placed on the property is indefinite or how it might affect a resale.
The cost of a good defense attorney is high, but it is these people who will fight in the courtroom to decide the fate of the foreclosure market. This may mean not only those losing a home, but new owners as well may be required to fork over hard-earned money to ensure that their rights are protected. All of this can be avoided, however, if one is aware of what they're getting into prior to making a commitment.
New laws, designed to protect lenders, homeowners, and new buyers have done little, but muddy the waters of the foreclosure market. In the end everyone may end up on the losing end. In order to protect one's interest, therefore, it's important that advice be sought from experts not only in the real estate market, but in the legal field as well.
When the Senate bill was passed it was found there was so much confusion and so many loopholes that few could figure out what it really all meant or how it was going to work. The revision was suppose to clarify the law but, in fact, has packed the courts with lawsuits that are leaving many destitute and without options. Additionally, since changes will be many years coming, new buyers of these properties are having second thoughts and for good reason.
Those promoting revision claimed that the current law was designed to protect those reselling a foreclosed home, such as a bank, from loosing money on the deal and making it harder to foreclose in the first place. However, the result was an interpretation of the law that allowed lenders to file a deficiency judgment against the property if the sale price was less than the debt owed. This addition not only left the former owners unprotected, but also placed a lien against the property so new owners were unable to resell until the old debt was resolved.
Those who buy in this area to become snowbirds may find they have bitten off more than they can chew as there is also a residency clause included. What it states is that anyone absent from their property for 30 days or more, who have missed even one payment, can return home to find their possessions and property sold in order to repay the mortgage. And, if sufficient funds are not collected, the former homeowners are held responsible for the difference. This also includes cases of extended hospitalization. We can all agree that lenders have been coming out on the short-end of the stick in the foreclosure market, but one must ask, is the law fair? Only the courts can decide.
There are many issues associated with the new law that will take many years to sort out in appeals court. It is here that new laws receive interpretation, but so many judicial actions are now underway they may never sort it all out. The end result could be a repeal of the law that leaves lenders in financial straits, old owners permanently losing their property, and new owners not knowing where they stand. Eventually, new owners may find they have spent a ton of money and have nothing to show for it in the end.
Many fear the results of a repeal of the law, if it is deemed unconstitutional, since it may leave them in a far worse situation than they are currently in. New buyers may find they are in the worse position of all having bought a home that includes a lien for more than the value of the property and finding they may have to return it to the former owners in the end anyway without compensation. One example of how complex this can be is that it is unclear whether the lien placed on the property is indefinite or how it might affect a resale.
The cost of a good defense attorney is high, but it is these people who will fight in the courtroom to decide the fate of the foreclosure market. This may mean not only those losing a home, but new owners as well may be required to fork over hard-earned money to ensure that their rights are protected. All of this can be avoided, however, if one is aware of what they're getting into prior to making a commitment.
New laws, designed to protect lenders, homeowners, and new buyers have done little, but muddy the waters of the foreclosure market. In the end everyone may end up on the losing end. In order to protect one's interest, therefore, it's important that advice be sought from experts not only in the real estate market, but in the legal field as well.
About the Author:
Finding the details you need to find AZ foreclosures is easy when you know where to look! Start today, and find your Arizona foreclosure fast!
No comments:
Post a Comment