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by toomuchtodo
3681 days ago
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At the time, I was backed into a corner so to say. It wasn't something I went into willingly. My HOA would not allow me to rent the townhouse out (too many rentals already), nor could I come up with the $150K to bring the mortgage down to the new fair market value. So, mailed the keys back to the bank and walked away. |
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Note that this doesn't actually work to reduce your debt everywhere (even everywhere in the US); its basically voluntarily inviting the bank to foreclose, which they usually will do (because if you are abandoning the property and they don't, the longer they go before foreclosure the more likely that, just due to being abandoned, the property will lose more value.) But when they do foreclose, some jurisdictions allow foreclosure deficiencies -- that is, they allow the conversion of the amount of the mortgage debt that the lender doesn't recover in a foreclosure sale to be collected as an unsecured debt.