If my mobile home is “underwater”,can I just pack up and give the keys back to the bank?

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If my mobile home is “underwater”,can I just pack up and give the keys back to the bank?

I’ve been paying on mobile home mortage since 1995. I currently owe more than what it could ever sell for. I want to give the home up.

Asked on January 31, 2011 under Real Estate Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You can ask if the bank will take the home back, but you don't have a "right" to simply give the home up. You are obligated under the mortgage unless and only to the extent that the lender agrees voluntarily to let you out of it. That means that if you just walk away, default, and allow the home to be foreclosed upon:

1) You will have a default on your credit record.

2) After the foreclosed property is sold by the bank at a foreclosure auction or otherwise, whatever it brings in will be applied to the remaining balance you owe on the loan. Since that will almost certainly result in their stiill being a balance owed--after all, the home is underwater on the loan--you'll still owe the bank money and the bank will have the option of suing your for the rest that you owe.

You should speak with a bankrutpcy attorney; bankruptcy may be the best option for you.


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