[calkid]

I am moving do to being transferred for work. I don't think that we will get what the house is worth because of the current market. What is the best option for us to do? Should we let the mortgage company know that we can't afford to keep the house after we move and let them sell, should we try to sell and see what we may get and hope for the best or should we file bankruptcy on the house?
Thanks for your help.

[Dr D]

First check to see what assistance you can get from your company's relocation department. Some larger firms have very generous relocation plans. If help from your employer is not forcoming, see if you have enough resources to effect a sale, even if it means pulling cash from your pocket. Renting it out probably would not work. You would most likely have a negative cash flow; a bad tenant could trash the house in short order; and being a absentee landlord would increase your costs of renting. If all else fails; once your Realtor has determined a reasonable sales price, you could contact your leder to see if they might be agreeable to a "short sale". This is where the lender agrees to settle for less than is owed on the property. They may or may not agree to this. A Foreclosure, Deed in Lieu of Foreclosure, or Bankruptcy should only be a LAST resort, as those options will trash your credt for some time to come. I wish you the best

[calkid]

Thank you for the reply and the information Dr. D
Can you explain what a Deed in Lieu of Foreclosure? My other option I was thinking is if they foreclose on the house, I will have to probably file for bankruptcy anyway for the remainder of the funds that is owed. Would it be easier to file bankruptcy before the foreclosure or is it possible that the mortgage company might work out a payment plan?
Thank you all again for your help.
Also, I don't think my company has any relocation assistance. I don't think it would be so bad, if the housing market wasn't so crazy right now.

[Dr D]

Generally, a mortgage must be in default for a Deed in Lieu to be considered. The lender is under no obligation to accept a DIL. Your Note for the debt on your home is secured by a Realty Mortgage or a Deed of Trust. About 1/2 the states use the Realty Mortgage, and the other half use the Deed of Trust, or both. Look at your loan papers and see which you have. If yours is a D of T, it most likely has no provision for a deficiency balance from the borower, in the event of a Trustee Sale (Foreclosure). If it is a Realty Mortgage, there will be a Judicial Foreclosure, and the lender can pursue you for a deficiency. A Foreclosure or Deed in Lieu will usually prevent you from getting a regular home loan for 3 years.

[calkid]

Thanks again Dr. D for your help.