we purchased a home in colorado in 2001 in a community where we own the house but not the land. we have tried and tried to sell the house for the past three years but to no avail. We are not asking a lot for the house, just the pay off price. We have since retired and can no longer make the house payments and are wondering what would happen if we gave the house back to the bank. We have never missed nor been late on a payment. Our credit score is very high. Will this destroy our credit score like a foreclosure or what will happen and how do we go about doing this?

George_1950

Welcome to AMHD. Just curious: What is the value of your house and what is the debt? Can you rent the house? Most likely, the bank will sell the house at auction and hold you responsible for any unpaid balance.

thebarnes

We had it appraised about 3 yrs ago and it appraised at $110,000. We owe about $85000 on it. Currently it is rented but under the conditions of the covenant, we aren't suppose to rent. It must be owner occupied as we don't own the land. We are having a problem with our renter not paying her rent timely and the lot lease is becoming more than we can comfortably take care of. I understand about the bank auction and all that stuff but will it kill our credit scores as we have very high ones now. Around 795 the last time we checked.

excon

Hello Barnes family:

Of course it'll KILL your credit. The bank doesn't care whether it had to take your house or you gave it to them - same difference.

You need to sell it NOW, because the bank will and they'll take the first offer even if it's waaaaay less than the house appraises for because they know they can collect the difference from you.

excon

Fr_Chuck

Ok, I am having a serious issue here, you "don't own the land" who owns the land ? what sort of agreement to own the house is there without owning the land? will they have to pay rent for the land ?

thebarnes

No, we don't own the land. It's in a community like a mobile home park where you own the mobile home and not the land. Yes rent will have to be paid which is about $450 per month.

Fr_Chuck

So it is more of a movable home? do you own it by deed ( doubtful if you don't own the land) or do you own it by title.

Since if they have a title on it, they will do a repo, like a repo on a car. doing this it will ruin your credit and also they will add repo fee's, sale fees, advertising fees, and legal fees, after they sell the property, they take the sale price from the money you owe and you still owe it, they will then get a judgement against you, and come after the rest of thier money.