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Roger
Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31025
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I was buying a house in Alabama, when I took a job and moved

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I was buying a house in Alabama, when I took a job and moved to Tennessee, I have tried to keep the Alabama house rented to make the payment since it has not sold! but my renters are not paying on time....I am in another state and this is rough on me,causing me to miss work, what are my options as to walking away from the house in alabama?

Kirk Adams : Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question. I'll be glad to assist.
Kirk Adams : The best option you likely have is to offer the property back to the lender via deed in lieu of foreclosure. This is a peaceful return of the property to the lender - - which avoids foreclosure AND also allows you to avoid the lender from seeking a deficiency judgment against you for the difference in the home's sale price AND amount you owe on the note.
Kirk Adams : The only issue is that the lender has to agree to the deed in lieu, and it is totally up to the lender to decide whether or not to accept it.
Kirk Adams : You'll just have to approach the lender and ask if it is willing to accept a deed in lieu.
Kirk Adams : IF the lender is unwilling to accept a deed in lieu, then there are many fewer options - - either file bankruptcy and have the debt discharged or allow the foreclosure to proceed and let the lender recover and sell the property.
Customer:

there website states they can still sue for deficit even after taking deed in l ieu?

Kirk Adams : IF the foreclosure occurs and the sale doesn't bring enough money to pay off the loan, then the lender would have a right to sue for the deficiency.
Kirk Adams : No, a deed in lieu of foreclosure eliminates the lender's right to seek a deficiency judgment. This is so because the lender didn't recover the property through an arm's length sale/transaction.
Kirk Adams : However, if your loan documents state that a deed in lieu will not prevent a deficiency, then you would have to make sure that this was stipulated in your deed in lieu agreement.
Customer:

ok, Chase's website just says they would sue to recover ...I will ask them about deed in leiu,I do not see it in my contract anywhere

Kirk Adams : You'll make a deal with the lender for them to accept a deed in lieu, and as part of that deal, you need to MAKE SURE that it says the return of the property is in COMPLETE SATISFACTION of the debt and that no deficiency will be sought.
Kirk Adams : This is generally is part of the agreement, but you definitely need to make sure it is in there.
Customer:

ok thank you so much

Kirk Adams : I did some additional looking and Alabama law does allow the lender to seek a deficiency under this circumstance (http://www.foreclosurelawfirms.com/resources/foreclosure/foreclosure-basics/how-common-deficiency-judgments-alabama), BUT if you make it part of your agreement that the deed in lieu is to fully satisfy the loan, and that no deficiency can be sought, you would be covered from having a deficiency judgment entered against you.
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