David Z asked:
I can not afford my house,I have 200k mortgage and 45k equity loan on it,if I give up the house,can I stop paying both mortgage and equity loan?
Is it a bankruptcy?the bankers refused to answer my question.
Thank you for your help
Paula
I can not afford my house,I have 200k mortgage and 45k equity loan on it,if I give up the house,can I stop paying both mortgage and equity loan?
Is it a bankruptcy?the bankers refused to answer my question.
Thank you for your help
Paula
Cathy
it isnt bankruptcy…If the house is foreclosed then all the leins on the house like the first and second mortgage go with it. An equity loan is nothing more than a second mortgage..When the house is sold or auctioned by the lender the lein holders get whatever is generated by the sale..But, that is it…they cant come after you separately if that is what you are asking. This is the risk that a lender takes by giving you a mortgage. It is why they look at credit scores and income docs so closely before they make the loan. If you default…they lose..your credit will be shot but the debt on the house wont follow you….”Unsecured loans” like credit cards are a different story….you would need to file BK on them
Comment by EX-REPUBLICAN — May 25, 2010 @ 10:20 pm
Erik
If you give up the house it is a foreclosure not a bankruptcy. You should approach your lender about doing a short sale of the home. You should also talk with them to see what their policies is for the money owed after the foreclosure or short sale.Your credit will be ruined for 7 1/2 years.
Also the mortgage lender almost always takes a fall at foreclosure. They secure the house as collateral for the loan on which you defaulted, but they are usually unable to sell the home for fair market value. In fact, it is common to see a foreclosed house selling for 70% less than what it is worth, which is a great deal less than the balance of the loan with the original borrowers. So you COULD (depends on policies of lender) owe money after foreclosure.
Before foreclosure, the bank can ask a judge for a deficiency judgment, which is a monetary judgment against you for the deficit. This is the same thing as any judgment won in civil court. The judgment can often be enforced by garnishing wages or placing liens against other property owned. .
If you want to know your options with a bankruptcy, you can see a bankruptcy attorney free for consultation.
Comment by Dixie Darlin' — May 29, 2010 @ 7:41 am
Beatrice
The banks get hit if you give it back. you could be on the hook for both the difference they sell the house for. say they get 180 k, you would have to pay 75k and not have a house. you would be better re negotiating for a new mortgage the fed is making it much easier to keep your house but lower your payments, Get hold of the bank and have them re do your loans, there are incentives for them to do that now. Like a half million houses sitting empty.
Comment by redd headd — May 31, 2010 @ 5:41 am