Balloon mortgage question

Asked by Danielle, Michigan Fri Feb 1, 2008

We currently own a condo in MI and the balloon mortgage ends this month. We cannot reset the mortgate b/c we don't live on the property. We can't afford to pay the property off, we don't have the money. We can't refinance w/another mortgage company - we tried - because the appraisal came back lower than the amount we owe. We don't want the property, we currently have renters who pay only sometimes and even that doesn't cover all the costs. What are our best options?

Help the community by answering this question:

+ web reference
Web reference:


Corey Grushin, Agent, East Brunswick, NJ
Tue Feb 5, 2008
Untimately the decision rests with the both of you. You should contact your lender directly with the real estate market the way it is lenders are cutting deals and they will probably be more than willing to negotiate with you.
At the present time the term for this situation is called under water", and the bank will understand your position if you just wanted to walk away. You can just turn over the keys to the property to the bank so they don't have to go through the cost & trouble to foreclose on you. To do this will also help you preserse your credit history. The only problem may be if the bank decides to come back to you for a short fall judgement if they end up selling the property for less than the amount you owe and want you to come up for the rest of it.
Short fall judgements are not allowed in certain states if the fair market value of the property at the current time is less than the amount owed. You should ask a real estate attorney in Michigan what are the legal consequesnces to all this. Good luck & I hope this information helps. Any further questions please feel free to E-mail me at
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more