If I give my keys back to the bank because the morgage on the rental is $380,000 and similar houses are selling for $330,000 can the bank come after me for equity that I have in my primary residence ($85,000)? I can't make the 2 morgage payments any more and I keep getting screwed by tenants who have rented it.
2007-07-16 23:39:12 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
If you "own" them you signed contracts with the bank to buy them. The bank gave you money, not keys so you cannot give the keys "back" to the bank. The bank doesn't want the house. Yes, they can ruin you. If you default on the payments, they can sell the house at auction. If the sale is less than the note, they can take you to court to get the remainder of the balance. You could lose your other house as well. You better start talking with the bank about this. They would rather try to help you keep the house than deal with the nasty business of foreclosure and a lawsuit.
2007-07-16 23:57:15 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Generally that is true, the 2 are separate but you do need to check the mortgage contract and see if it is with or without recourse. If it's without recourse, and many are, the foreclosure on the rental (or deed in lieu of foreclosure) will close the book on the debt.
You may want to look into other possible solutions to help preserve your credit rating which would take a major hit with a foreclosure, though. Turning the property over to a professional property manager may solve your problem tenant issues and get you back on track. Or look into a short sale where part of the negotiated settlement can include keeping your credit relatively clean.
Good luck.
2007-07-16 23:51:56 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 1⤋
You can give deed in lieu of foreclosure, but if the mortgage sells the property for a loss the difference in the mortgage balance due and the amount they received will become "income" to you. So if the mortgage is $100,000 and they only sell it for $90,000, $10,000 would be considered income to you, and report as such to the IRS.
2007-07-17 01:09:52 · answer #3 · answered by Anonymous · 0⤊ 0⤋
you can try no guarantee the bank will take it back but can ask,
in the end the bank may allow a short sale, or may look to auction off the place and come after you for the difference or write it off hard to say
2007-07-16 23:53:52 · answer #4 · answered by goz1111 7 · 0⤊ 0⤋
Rent-To-Own Home - http://RentToOwnHome.uzaev.com/?jwpU
2016-07-13 04:41:59 · answer #5 · answered by ? 3 · 0⤊ 0⤋