What's it called when you basically stop mortgage payments and give your house back to the bank?

Question

We have a mortgage, loaned from the bank, and we're considering just giving it back, because we can no longer make the payments. What's the official term for that?

Answer 1

Foreclosure

If you can try to keep making payments or sell your house it would be best.  Otherwise it's going to ruin your credit.

If you the borrower initiate then it is called deed in lieu of foreclosure.  You still get a hit on your credit but it's not as bad as a foreclosure.

Keep in mind you might still have to pay deed tax on thecanceled debt which is considered as income. The tax is calculated on the basis of unpaid balance.

Answer 2

What ever you call it, it is not good. It will seriously damage your credit and put you on the street.

Of course you should start by contacting your servicer but before you abandon all hope, try contacting these folks to see if there is anything that could be done to find an affordable payment solution to keep you in your home.

http://hopenow.com/

I know it is tough out there and maybe there is nothing that can be done, but it is worth checking out all of your options.

Good luck.

Answer 3

The end result it is called a foreclosure no matter if you turn the house over to your lender or the lender actually foreclose on you because you fail to make the monthly mortgage payments .

You must be approved for a deed-in-lieu of foreclosure. This simply means that the lender or bank accepts the house from you, thus you are no longer obligated for the monthly mortgage payments nor the upkeep of the house.

If you contact your lender they might be able to work something out with you about your payments.

You should contact your lender's Loss Mitigation Department. Don't be thrown off the trail by some telephone answerer insist on speaking to a person from the Loss Mitigation Department and don't get off the telephone until you have spoken to someone from that department.

Ask if there are other programs available to you that can eliminate you from your existing situation.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 4

First try contacting your lenders loss mitigation dept. It may be hard to get to the right person. If you are 2 payments or more behind on your mortgage they can start the foreclosure process.

Time isnt on your side. Try working with a loss mitigation company that will work on your behalf with your lender to get an option that will keep you in your home. Foreclosurelight Loss Mitigation LLC helps many homeowners this way,

Answer 5

Deed in lieu of foreclosure -- meaning you're giving the deed back instead of having the bank foreclose.

Answer 6

being a dead beat.