As a result of the national real estate crisis many Phoenix and Arizona homes remain underwater. The recovery has helped, but not enough to lift all homeowners into positive equity territory.
It has come to our attention in speaking with clients that many times people have ceased payments on a second deed of trust. Usually this was done as a matter of necessity to reduce living costs. A loan secured by a first deed of trust must be paid or the home will be foreclosed upon. However, a holder of a second deed of trust will seldom foreclose on an underwater property. So payments on the second loan can be stopped and often were stopped to obtain short term relief.
It is now eight years since the housing crash and we are finding individuals who have deeds of trust recorded against their homes where no payment has been made for years. In many cases, their homes are still underwater. If the old deed of trust could be eliminated, it could make the difference between having an underwater home or a home with substantial equity.