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    Tacobella's Avatar
    Tacobella Posts: 1, Reputation: 1
    New Member

    Nov 1, 2006, 02:52 AM
    Voluntary giving your house back to the bank
    I would like to know the nature of voluntary repo of a home. Can you let me know what would happen if I can no longer afford my mortgage and opt not to refinance because the mortgage would still be too high since I've had a death in family 5 months ago and I no longer have any assistance with my mortgage. Is it the same as voluntary repo on a car. I own my car out right, have never been late on my mortgage. I tried to sell my house and it just isn't going anywhere. Can I voluntary let my home go and what are the consequences. Help, need information badly in New Hampshire.
    tkrussell's Avatar
    tkrussell Posts: 9,659, Reputation: 725
    Uber Member

    Nov 1, 2006, 03:55 AM
    Generally, the bank or mortagage company must still follow through with the foreclosure procedures set in place according to your contract and local laws.

    I have not heard of any bank just taking the keys from a defaulted owner and leaving it at that. The home will be sold at auction, the proceeds will be used to pay off the note, and the remaining balance will be demanded to be paid by the debtor, and if not paid, they will sue for that balance. The foreclousure and the lawsuit will hit your credit report.

    Best to consult with an attorney first, ask about a "short sale". This is a method the bank may allow, where you, with their permission, sell the home for less than the principal amount owed, and they "forgive" the remaining balance. The balance is then considered as "income" and taxable by the feds.

    But this method eliminates the negative hit on your credit, with no foreclosure and lawsuits.

    Not a real estate or law expert, just someone that has been on the "key" side before.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man

    Nov 1, 2006, 07:46 AM
    You don't say how much equity you have in the home. But just giving the house back (and it is possible) won't release you from your debt. If the house cannot be sold for more than the balance owed, you will still be liable for that balance.

    If you give it back to the bank or even allow a foreclosure, you lose control of what the house will be sold for. I suggest you talk with other real estate agents about selling.

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