I want to abandon my property and walk away from the loan. What should I do?
You have a few common options.
1. You can do nothing. The bank will proceed with its foreclosure action and reclaim the property.
2. You can ask the bank to accept the property, and dispense with the foreclosure.
3. You can attempt to sell the property.
My house was foreclosed on in Dec 2007. We had an 80% and 20% loans at closing with same name. The bank foreclosed on the 1st but not the second. They have sold it once, now bought back operation under a new name. I don’t understand, nor was it explained to us that they could come after us. What are our options?
I would have to take a look at your documents to be sure. As a general rule, either mortgage can foreclose. However, if the first forecloses on the second, the second lien is wiped out. This means that the second lienholder’s only recourse is to sue the borrower. The second lienholder can go after the borrower or a co-signer/guarantor. The time limit is four years from the date of the last activity on the loan. Also, the first lienholder can go after the borrower for a deficiency, if the house doesn’t sell for enough at auction to cover the balance due on the note.
#1 by A Grandberry on August 18th, 2009 - 8:00 pm
My house was foreclosed on in Dec 2007. We had an 80% and 20% loans at closing with same name. The bank foreclosed on the 1st but not the second. They have sold it once, now bought back operation under a new name. I don’t understand, nor was it explained to us that they could come after us. What are our options?
#2 by David Leon on September 16th, 2009 - 11:45 pm
I would have to take a look at your documents to be sure. As a general rule, either mortgage can foreclose. However, if the first forecloses on the second, the second lien is wiped out. This means that the second lienholder’s only recourse is to sue the borrower. The second lienholder can go after the borrower or a co-signer/guarantor. The time limit is four years from the date of the last activity on the loan. Also, the first lienholder can go after the borrower for a deficiency, if the house doesn’t sell for enough at auction to cover the balance due on the note.