We are plannig to give our house back to bank.. I have stopped making payments last month. Its very difficult

Asked by Rahul, sharma Sun Jul 13, 2008

to pay the mortgae and they will increase it in near future. Should I go for loan modification or for foreclouser. In case of foreclouser will they collect money from me. Also if they sell the house after foreclouser will they charge me the tax for the loss they have incured. I have read that ther is new law in which they won't collect the tax. I am in california.

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Alex Montelo…, Agent, Seal Beach, CA
Wed Apr 15, 2015
So I'm curious... This question was asked back in 2008. So what did you decide Rahul? Did you try the loan modification or opt for the foreclosure? Where are you now? I have helped clients that have had a foreclosure on their record and they are now back on their feet, in homes and life is good for them. No more doom and gloom on the horizon.

Alex Montelongo/Broker
Coldwell Banker Star Realty
562-810-7387 Cell
BRE Lic #01456982
0 votes
RonS, , Concord, CA
Fri Feb 6, 2015
There is no law about not collecting a tax in California. There is also no law about not collecting a tax on a federal level. If you have debt forgiven in a foreclosure, you will be issued a 1099. Your tax professional can determine if you actually have any liability based on insolvency rules and/or other potential loopholes.

Collect money from you in a foreclosure? Umm...no. They don't collect any money from you. In a foreclosure, they take your home.
0 votes
Scott Godzyk, Agent, Manchester, NH
Thu Feb 5, 2015
If you want to keep you home, cal the bank, ask for the HOME RETENTION DEPARTMENT. A loan modification can lower the rate of your mortgage. If you want to give it back, first try a short sale, it is better on your credit as you can negotiate. If you just want to give it back, ask for a deed in lieu of foreclosure as it is better than a regular foreclosure which can haunt you for 7-10 years
0 votes
Chel Pina, Home Buyer, Beverly Hills, CA
Thu Feb 5, 2015
If you want to keep your home, call me Chel Pina (323) 378-2728. No fee. I will provide the necessary information you need to move forward with your home. I will share a few trade secrets regarding foreclosures.
0 votes
Trade secrets? Sounds like snake oil to me. There are no trade secrets. Foreclosures by law are open and public. There can be no trade secrets.
Flag Fri Feb 6, 2015
Hena Martin, Agent, Hot Springs, CA
Fri Jan 18, 2013
I am a short sale specialist ,please call me to discuss your options ,Ofcourse if you intend to keep your home you should certainly try to modify I am just a phone call away ,I have clients in your area.
May be we can atleast talk ,people are behind due to circumstances and options have to be discussed .HENA MARTIN (BROKER)OWNER
0 votes
Kari Brandler, Agent, Rancho Cucamonga, CA
Mon Jan 14, 2013
Here is a link from my website telling you all about Short Sales. I can help with a Short Sale if you have not already listed your home.


Good Luck,

Kari Brandler
1 Advanced Realty & Appraisal
R.E. License 01751970
Cell: (909) 292-6142
Email: kari.brandler@yahoo.com
Website: http://www.karibrandler.com
0 votes
R.janet25, Home Buyer, Fontana, CA
Sat Oct 13, 2012
So do i call the bank and ask them for a SS approval?
0 votes
R.janet25, Home Buyer, Fontana, CA
Sat Oct 13, 2012
I had stop paying my mortgae for 4 months and want to sell the house back to the bank. How can i do that what do in need to do ? Well do i call the bank and ask for a SS approval?
0 votes
I Chel Pina will provide the necessary information you need for free. No fee involved to learn the proper steps.
Flag Thu Feb 5, 2015
Kawain Payne, Agent, Seal Beach, CA
Mon Jul 2, 2012

A short sale may be your best bet, if you have a fincial hardship you should be able to get SS approval from your bank.

Best Of Luck to You,

Kawian Payne, Realtor
0 votes
Fp12319, , Long Beach, CA
Thu Mar 31, 2011
i would say you leave foreclosure as your last option. the good news is that CA is a non recourse state. that means if you lose your home, the bank cannot come after you for the balance owed. another piece of good news is that if you can show that you are insolvent (debt > equity), you will not have to pay taxes on the forgiven debt. Basically, worst case scenario, you walk away with the only real punishment being a hit to your credit score. and even that fixes itself with time.
0 votes
Sara Mehrpou…, Agent, Los Angeles, CA
Wed Jul 14, 2010
Rahul, feel free to visit my websites for information:

You have not provided too many details regarding your situation. Feel free to contact me.

Sara Mehrpouyan
Rodeo Realty
Specializing in Foreclosures and Short Sales
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Thu Mar 11, 2010
Hi Rahul,

Is your loan a recourse loan or a non-recourse loan? If your loan is a recourse loan then the lender can foreclose and then go after you for other assets or garnish wages. How many loans do you have on your property?

Hannah Fliegel
0 votes
You should read the original post, it's in California. A non recourse state.
Flag Fri Feb 6, 2015
Ibuyshortsal…, Home Buyer, Los Angeles, CA
Wed Mar 10, 2010
Don't give it back. It's better to do a short-sale. Let me buy the house from you ALL CASH regardless of condition and price. Sincerely, F. Liu, Trustee

My website http://www.ibuyshortsaleproperties.com
just use the inquiry if you like so i could give me
more free info and 1099c and deficiency
0 votes
NonRealtor, , 23456
Mon Jul 14, 2008
You're probably thinking, "I should have rented", it would have been cheaper, and your credit would still be ok.
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Mon Jul 14, 2008

These are the steps I would advise. Of course, I a making the assumption that you have no equity in your home. If you do, then list it for sale and walk away with a few dollars in your pocket. If not then:

1. If your situation has not changed significantly from the time you purchased your home, or obtained the loan that is now getting difficult to pay, then DEFINITELY go to your bank and ask for a loan modification. This will allow you to reduce your payments (and possibly the principal owed on the loan, as some lenders are actually writing loans down to market), stay in your home, and protect your credit from the hit of foreclosure.
2. If your personal situation has deteriorated significantly since you bought your home, or obtained the loan, then you might want to speak with a realtor who specializes in helping distressed sellers and / or short sales. This gives you more control over when you move out. Also, some banks are offering forebearance agreements while the home is being marketed for sale and therefore you will not get the 30 / 60 / 90 day late reporting on your credit or the foreclosure (filing of Notice of Default) filing on your credit. The short sale will be reported, however, we are seeing much less effect on credit scores from a short sale than a foreclosure.

I am happy to discuss your options with you off line (contact me through my profile), as I specialize in working with distressed sellers. I might be able to help you analyze your situation and make an informed choice. Then you can look to finding the right professionals to help you out in your area.

I am committed to helping people find peace of mind even in difficult situations and helping you see all your options so you can Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes
Sylvia Barry,…, Agent, Marin, CA
Sun Jul 13, 2008
Hi Rahul:

i would definitely approach the lenders and see if I can do a loan modification first. The lenders are more likely to do that now a days and I have recently heard of one guy who is staying in his home due to loan modification, so good luck on that!

Most likely they will not collect money from you if they for close on you, but your credit will be ruined and you won't be able to buy for a while.

Theoretically, you will not be taxed if all your loan is for puchasing the house (there is no equity loan where you use the money to buy a car, etc), and this is your primary home. However, the best way for you is to talk to either an accountant or a lawyer about it, they can look at your specific siutation and give you the most up to date changes in law for this.

Sylvia .
0 votes
Yvonne Cousar, Agent, Round Rock, TX
Sun Jul 13, 2008
Hi Rahul... Maybe you should try talking to your lender about a loan modification before accepting foreclosure as the only alternative.
Web Reference:  http://www.YvonneBaker.com
0 votes
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