Foreclosure in Minneapolis>Question Details

Caprice Ayau, Real Estate Pro in Maple Grove, MN

Client wants to give the keys back to the bank what are the ramifications?

Asked by Caprice Ayau, Maple Grove, MN Mon Feb 9, 2009

Can lender come back to borrow if they gave the keys back prior to redemption date for the difference of what they end up selling the property for if it is less than owed?
I also heard that on a short sale lender can come back to borrow for the diference 6-10 years later. Is this true?
Anyone have the answers?

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Hi, Caprice!
When you say "borrow" do you mean borrower? Borrower is the person, but borrow would be the act of borrowing th money.

It's my understanding that once the lender accepts the keys, it's called deed in lieu of foreclosure, which means the borrowER has no further liability for the property.

As for short sale lender requiring borrower to pay the difference, it's my impression this happens while the entire process is going on, in order to close and clear up the title issues, etc.

I may be wrong, but this is what I've gleaned .
1 vote Thank Flag Link Mon Feb 9, 2009
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0 votes Thank Flag Link Wed Dec 22, 2010
Each lender stands alone what they will or will not do. Who can state an opinion of another professional. I recommend for all of clients "air on side of caution"

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0 votes Thank Flag Link Wed Dec 22, 2010
Do Not let the banks take your home away from your family!

Fight back, do something!


A "real" forensic loan audit performed by Auditors Alliance will provide you with enough ammunition to stop foreclosure and negotiate a reasonable loan modification. We will examine your entire loan file including post closing documents and securitization agreements to determine if the Note and Mortgage were properly transferred to the entity who is claiming to be the secured party. This is not the same old "show me the note" defense that is more hype than substance. A skilled attorney armed with a detailed securitization and standing analysis can effectively challenge the purported lender's right to foreclose and help you stay in your home, often without making mortgage payments, while the case works its way through the legal system. Once faced with a lengthy and expensive legal battle most lenders will elect to negotiate an affordable modification or short sale.
0 votes Thank Flag Link Wed Dec 22, 2010
If you do not make more than 500,000.00 a year they would not come after you. But yet I believe you can not have a certain, or show a certain amount of money in your account. They would have to go after millions of people before they get to you. If its an investment home just give them back the keys and tell rhem you just cant afford it any more,
0 votes Thank Flag Link Mon Jul 26, 2010
the site below should be able to provide answers to alot of your questions.
0 votes Thank Flag Link Wed Feb 11, 2009
Cindi Hagley, Real Estate Pro in Pleasanton, CA
MVP'08
Contact
There are several different scenarios that could be played out and I don’t know your specific situation but my understanding of MN foreclosure law is this. If you have 1 mortgage and the property has gone through the sheriffs sale the mortgage company cannot come after you for any deficiencies (unless owners vandalized property), I would imagine that includes giving the keys back to bank. If you have more than one mortgage the mortgage that did not foreclose can attempt to recover their full balance if they do not redeem on the property or their partial balance if they do redeem and sell the property for a loss. If the house has not gone through the sheriffs sale the bank still has options to come after the borrower personally.

In the case of a short sale you can stipulate to the bank that they waive their right to any decencies and cannot come after the borrower, the same could be done under a cash for keys program. Hope this helps. If your client is concerned about the bank coming after them it may be best to have them speak with an attorney to avoid possible liability.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Mon Feb 9, 2009
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