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Loren
Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 29081
Experience:  30 years of real estate practice experience.
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If a relative gives me cash to buy a home and I walk away

Customer Question

if a relative gives me cash to buy a home and I walk away from the current home I am underwater in , can they come back and take my new home, or prevent a short sale on the old house. This is in Arizona. Thank you!
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Loren replied 1 year ago.
Thank you for using JustAnswer. I am Loren, a licensed attorney, and I will do whatever I can to answer your question.
Before I answer a bit more detail would be helpful please.
Was the money given as a gift or a loan?
Did you sign anything to repay or pledge the house as collateral?
Customer: replied 1 year ago.
It is a mostly gift, partial loan, nothing to be signed.
Expert:  Loren replied 1 year ago.

If there are no signed agreements then they have no rights to the property. Any loan is unsecured and they would have to sue and get a judgment before they could exercise any collection remedies.

Customer: replied 1 year ago.
no, my current mortgage company cannot take away the new home? Is that correct? Also, would buying this new property prevent me from doing a short sale on the mortgaged home?
Expert:  Loren replied 1 year ago.

Anyone with a mortgage interest in the property can foreclose, but the relatives who gave you money without any signed agreement can not take your home.

Customer: replied 1 year ago.
What I am asking, is the home that is mortgaged, the one I will be walking away from, can they go after my new property?
Expert:  Loren replied 1 year ago.

Only if they get a judgement against you for a deficiency.

Expert:  Loren replied 1 year ago.

If you get a mortgag on the new one then they will still be behind that lender in priority.

Customer: replied 1 year ago.
I am not getting a mortgage on the new one! So the mortgage company for my old house can put a judgement on my new house?
Expert:  Loren replied 1 year ago.

They would need to get a deficiency judgment first.

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