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

    Jan 8, 2009, 11:10 AM
    Giving House Back to Bank
    I am getting ready to leave the country for my job for appx. 2 years. I am unable to sell my house and wish to give it back to the bank. My equity is very low. I have the initial mortgage and a home equity loan. I stopped paying on the original mortgage 2 months ago. I still pay on the home equity.

    How do you give it back to the bank, what are the ramifications, and should I also stop paying on my home equity?
    pacific nw's Avatar
    pacific nw Posts: 117, Reputation: 11
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    #2

    Jan 10, 2009, 02:38 AM

    Your credit will stink for a long time if you let it go back to the bank. Also, there is the possibility that you will be sued for the difference between what the house sells for at auction and what you owe on it. Also, the IRS may require you to treat any forgiven amount as income and you will be taxed on it. Other than that, can't think of anything wrong with letting the bank have it.

    Hmmm, can't think of any reason to pay on the home equity loan if you're planning on dumping the house.

    If you want further assistance in perhaps avoiding some of these pitfalls, email me at [email protected]. (yea, I deal with those kinds of things)
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #3

    Jan 10, 2009, 07:14 AM

    Well first you can't just give a home back to a bank, you have to ask them first and see if they will take it, and the 2nd mortgage will have to be paid off.

    Most likely you will just walk away and let them foreclose on it.
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