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Facing Short Sale Or Foreclosure?

by Charlie Allred

Short Sale or Foreclosure? My neighbor may be facing a short sale or a foreclosure in the near future… Its tough to see things like this even as a possibility for some of you guys out there.

Here’s the story: Like many people in the height of the market, he bought a home here in Phoenix. But, they way he bought it surprises me. He bought the home with zero down. He took a first and second mortgage to finance the entire purchase with no down payment. He has an adjustable rate interest only loan and a balloon payment at the 10 year mark. And, here’s the kicker: he was able to do this all while working as a waiter making 3 dollars per hour plus tips!

Now, I am happy he got the home… The disturbing part is what he was allowed to do to get it. Fortunately, he is very conscientious and a hard worker. He has now attained better employment and he is a wonderful addition to our neighborhood in that he is constantly improving his home and beautifying his area.

In speaking with him, he has no idea how he will protect himself when interest rates rise. He has never missed a payment. But, he is upside down tremendously and the banks will not even consider working with him unless he goes late or skips payments. What should he do? What can he do? An Arizona short sale might get him off the hook financially, but then what?

A short sale would be the best thing for him in my opinion financially… However, he doesn’t want to leave his home. And, until interest rates rise, he can afford to stay there if he keeps his job. I just wonder how this one will end… My sense is a short sale or a foreclosure. He is emotionally tied to the property and afraid of the unknown.

I wish him the best and I encourage you to look into Arizona short sale options if you are in a similar spot.

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