If I can qualify for a new, lower mortgage for a least expensive house, can I let the first home loan (larger) go back to the bank/mortgage under Michigan law? When the bank forecloses in Michigan I heard that you don't have to pay off the mortgage and if the house does sell, the mortgage company gives you a 1099 to file the difference as income on your annual tax records which you have to pay tax on. Is this correct? How do I find out for sure?

Your claim sounded outrageous.

I checked, and it seems to be true, there can be no legal action by law for the balance on the mortgage or any part thereof.

I think I may relocate to Michigan if my finances ever get in distress.