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    VJH's Avatar
    VJH Posts: 1, Reputation: 1
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    #1

    Jul 21, 2008, 09:19 AM
    Elective foreclosure
    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?
    progunr's Avatar
    progunr Posts: 1,971, Reputation: 288
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    #2

    Jul 21, 2008, 09:31 AM
    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.
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