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Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55608
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I am judgement proof in Indiana. My mortgage balloons in July

Customer Question

I am judgement proof in Indiana. My mortgage balloons in July and house value is 10,000 less than the mortgage, thanks to the recession. Can I legally leave the house? What about insurance, taxes,etc.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Richard replied 1 year ago.
Hi Judy. My name is ***** ***** I look forward to helping you. Yes, you can walk away from this without any liability for insurance or property taxes. You have basically 3 options when considering walking away from the property…foreclosure, deed in lieu of foreclosure or short sale. Even if the lender could pursue you for the deficiency...the amount owed over the amount of the foreclosure sale, they are not likely to do that because you have nothing they can take. Given those facts, it is unlikely the lender will spend the time and money necessary to get a judgment they believe is uncollectible in the end. Short sales are dicey. It is generally preferable to do a deed in lieu of foreclosure with the bank (where the bank accepts a deed in exchange for releasing the borrower from the loan) or let the bank foreclose. A deed in lieu of foreclosure saves the bank the time and expense of foreclosure. A short sale only frustrates the buyer and costs the buyer more because the broker is paid a commission which results in less proceeds being available to the bank.....and if the bank is going to release the borrower from the deficiency, it would do so under a deed in lieu of foreclosure without the frustration to the buyer and the payment of the broker commission. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!