Can I sell property back to the bank?

Question

I purchased my first condo on my own and have found it to be a less than great experience. Currently I'm faced with being upside down in my loan (due to the market) and all the units around me have been vacant for a long time (some years)

It also appears that the HOA has lost all interest in keeping the community clean and in proper order. So its possible that I'm faced with losses even after (or if) the market ever comes back up.

I've spoken with some financial advisors about my options and among the options; one was to sell/give the property back to the bank. I have good credit and have never been late on a payment.

I've searched and searched and can't seem to come across much information on this process, has anyone ever heard of this? and what might the consequences be if i were to go through with it?

Any information would be greatly appreciated.

Answer 1

I agree with ace. A deed in lieu is a way to go. But I dont think the bank will accept it. But it doesnt help you, it will go on your credit and lenders will look at it as a foreclosure.

You might have an option where if you loan is FHA its assumable on qualified assumption. They dont have to have any money down. There are basically no closings cost. They just take it over. Most lenders charge less the 500 bucks. Somebody buys it that has no cash, and you are off the loan and the deed. If you dont have an FHA loan you might want to get one. Take it to a fixed if you arent on one. Keep it as long as you can, rent it out in the future or eventually decide to sell it as an assumable mortgage.

I dont think you need to make your decision now. I would rent it long before you tried to give it back to the bank. It will absolutely affect your credit.

Answer 2

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Answer 3

Selling House Back To Bank

Answer 4

Technically the bank does not own the house and never did, it only owns the debt so it will not "buy back" what it never owned in the first place. In the US we call someone who values property a real estate appraiser and they have a different perspective from either the bank who would offer a mortgage or a realtor who wants to get the highest possible price for their client and the biggest possible commission in their pocket. If you are in danger of foreclosure because the property is now worth less than what you still owe on it then you might be able to negotiate with the lender to have them refinance the mortgage at a lower rate.

Answer 5

This Site Might Help You.

RE:
Can I sell property back to the bank?
I purchased my first condo on my own and have found it to be a less than great experience. Currently I'm faced with being upside down in my loan (due to the market) and all the units around me have been vacant for a long time (some years)

It also appears that the HOA has lost all interest...

Answer 6

Realize that banks do not want to own real estate. They will not willingly take it unless it appears to be in their best interest. This is not a good time in the market to try this approach. I'd suggest holding onto the property. Values will eventually rise and put you back values back in balance.
If you are faced with needing to liqudate, go talk to your banker about your thoughts on the property. Are you prepared to immediately pay off the difference? If not they may or may not be friendly to work this out.

Answer 7

It is not really that simple. If you can't sell it, or can't make your payments you can turn it over to the bank but it does affect your credit. It is like a foreclosure. You also have to be sure they will take it "without recourse" - meaning they can't accept it back, sell it for less than you owe on it and turn around and come after you for the difference.

You could try a short sale. You would sell the property for whatever you can sell it for. Once you have the offer you can take it to the bank and ask them to accept it "without recourse".

Answer 8

You are probably hearing about a 'deed in lieu' of foreclosure. You can approach the lender about it, but they don't have to accept, and probably won't since you are current with your payments.

There is no magical cure for a loss in real estate value and the mortgage taken to purchase same. If you can actually convince the lender to accept this proposition, you can expect your credit file to suffer a serious hit, as well as a possible judgment for the amount of the monetary shortfall.

Answer 9

You will have to talk to the bank about this. Some will buy it back at a reduced rate, and others panic and start foreclosure proceedings. The banks generally don't care about the others around you, just you. Good luck, and be careful when you talk to them on how you word things.

Answer 10

The bank doesn't want the property. Learn Spanish and just say adios. They cant come back on you. This may affest your credit though.