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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31770
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I took a loan (314,000 part interest only 1200+ per ...

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I took a loan (314,000 part interest only 1200+ per month with 700. added on each month - loan is now 333,000) out against my primary house (appraised 539,000) to buy a second house near my children. I thought I would be able to sell the primary house quickly. No such luck. After listing it for 16 months and tried e-bay, and craigs list I have given up on the plan to sell it. I tried to refinance it but although my credit score is 810 I don''t have the income to support a new loan. What happens if I walk away? Is there some way to have the mortgage taken over with out having my credit ruined? Can you sugest a way to help me ?

You want to aviod a foreclosure proceeding at all costs as this will hurt your credit score. If you can't sell the house, can't refinance and can't keep the current note up, your best option is to ask the mortgage company to accept a deed in lieu of foreclosure. This gives title back to the mortgage company for the balance of the note and avoids a formal foreclosure. This should allow you to avoid a foreclosure on your credit report.

Feel free to ask any follow-ups.

Roger and 3 other Real Estate Law Specialists are ready to help you
Customer: replied 9 years ago.
THANK YOU for your answer, but I need further clarification on some things.

Is there anything that I have to do prior to asking the mortgage holder to accept the deed?
I wish to protect my other assets (2 homes), cash, IRA's, pension, SS income, etc.
At present I have just placed a tennant in the primary house and given her a 1 yr lease. I would not like to "screw" (hurt) her by this process. Can or will she be evicted if I get the deed accepted by the mortgage holder?

There is nothing to do prior to requesting a deed in lieu of foreclosure. This should allow you to protect your other assets from the possibility of a deficiency judgment. It is not wise to get rid of or transfer your other property in the midst of the foreclosure - a court can allow all of these transactions to be reversed, not to mention that it makes you look less than honest to the court.

If you transfer the property, you have no say in what the bank or new owner does with it. However, you may be able to negotiate that if you give a deed that the tenant can occupy the property for the balance of the contract.

Customer: replied 9 years ago.
Thank you. Your relpy has cleared up my questions.
Great. Good Luck!