What are the legal ramifications of just walking away from your mortgaged house?
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What are the legal ramifications of just walking away from your mortgaged house?
My husband left me and I still reside in the house we purchased together. We want to sellbut the realtor said the minimum we would need to bring to closing is 14k. I can’t afford half of that, nor can I afford to refinance it myself. I am considering renting an apartment and just “walking away” from the house. What consequencess would I face, besides the obvious possible foreclosure? Would I have to file bankruptcy if my husband still wanted to sell?
Asked on September 17, 2010 under Real Estate Law, Illinois
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Why do you need to bring anything to closing? Are you behind in your mortgage or is that the realtor's fee and she anticipates the house selling for below market value or mortgage value? Sellers usually walk away with money not bring it to the table. But this economy has been a very difficult one. So are we starting under the assumption that the house is going to sell for less than the mortgage and that there will be no funds left for distribution? Then you can do one of two things: ask your bank to agree to a "short sale" meaning that you sell below the amount for the mortgage and they agree not to come after you for the "deficiency" which is the amount left on the mortgage. Very important. Need a seller lined up. Second, you can deed the house back to the bank. This is known as a deed in lieu of foreclosure. I would speak with an attorney - about this and the divorce as well - rather than file for bankruptcy. Good luck to you.
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