Has anyone every surrendered your home back to the bank? If so what was the process? Thanks?

Answer 1

You call the bank, tell them you are no longer making the payments and turn it back over to them. They either auction it off or sell it through a real estate agent.

They take out their money first, adding on any legal costs. If there is anything left over after the sale (and I've never seen one that there was), you get the money. Most of the time, the original homeowner still owes the bank money because by the time they tack on all the selling fees, legal fees and everything else, it winds up being more than they sell the house for. Remember, they aren't really trying to get top dollar for that house in the sale. They just want enough to cover their costs.

Then it goes on your credit record for the next 7 years.

It's a bad way to go if you can possibly do anything else. Try to sell it yourself if you can. You'll lose out if you turn it back to the bank.

Answer 2

If you have any equity in the home, see about doing a 'short sale'. The more equity you have in your house, the more that they would like to have the house.
If you have a non performing loan with a high debt to value ratio, they will probably try to work with you a bit more.

Lets say your house is worth 150k and you owe 86K why not sell your home for 90k and walk away. you at least get 4k out of the deal and your credit survives. If you owe 86k and you give it back to the bank, they will sell your house (to a relative probably) for 82k and then add on all kinds of lawyers' fees and paperwork and you will end up owing them 5k (balance of what the house was sold for and the additional fees they will tack on)

Answer 3

It's a horrible process. Don't do it if you don't have to. My late husband owned a house he took a second mortgage on before we were married. When he died he didn't have mortgage insurance so there was a huge debt there. They wouldn't let me make payments since I wasn't on the deed, but they still wanted their money!! I wound up bargaining with them and selling the house for a tiny amount and they were forced to charge off the rest. Here's the thing: even if you turn the house back you still owe the money!! Forclosure is an awful process and it will ruin your credit. My brother let his house go when he only owed a little bit on it. He could have sold it and paid them off. You can do that: sell the house, pay off the mortgage and be done with it.