If my house is for sale but due to the depressed real estate market there are no buyers, what would be the ramifications of letting the house go back to the mortgage company?
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If my house is for sale but due to the depressed real estate market there are no buyers, what would be the ramifications of letting the house go back to the mortgage company?
I need to move to a dryer climate due to health reasons. Im on a limited income.
Asked on September 16, 2015 under Real Estate Law, Arkansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
1 The mortgage company does not have to take the house--they have the right to, if you do not pay your mortgage, but are not required to do so. Instead, they could simply choose to sue you for the full remaining balance of the loan.
2 Even if the lender does foreclose on or accept the home back from you, unless they agreed in writing to accept the house as settlement in full of the loan, IF the home is worth less than the remaining principal of the mortgage, they could take the house then sue you for the balance left after selling the house in a foreclosure auction or sale. E.g say that you owe $300k and the home is currently underwater and worth $250k they could take the home and sue you for the remaining $50k.
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