I am in Florida.I cannot pay condo mortgage payments anymore. Is there a way of give up my condo voluntarily ?

Is there such a law that alows me to give it away and not hurt my credit?I have an exelent credit but I cannot make the paymants anymore. After I bought it 3 years ago (on top of the market in FL)the mortgage did not include taxes,after few months they added additional $500 escrow a month and recently association fees went high.Morgatge is for 180K and monthly payment is over $2000.Please help!

Public Comments

  1. Yes, you can give the house back to the bank. It's called a "Deed-in-lieu" for "deed in lieu of a foreclosure". You will agree to leave the home in pristine condition while the bank sells it, and they will agree to forgive a deficiency judgement against you should the sale of your home not cover the mortgage principle. You would call the loss mitigation department (NOT customer service) to negotiate the deal. Don't sign anything or agree to anything unless they won't seek a deficiency judgement against you, and I highly recommend you get a real estate attorney to look over the documents before you sign. As far as your credit goes, you won't be able to purchase another home for 3 to 5 years at A-paper rates. It will STILL appear on your credit as a foreclosure, and banks will treat it as a foreclosure for future lending purposes. It will damage your score....there is no way around it. However, it is the BEST alternative if you can't sell it and know you can't continue the payments.
  2. Ouch! We have the same kind of payment shock here in Texas. I think it's criminal for lenders to under-impound like this, but what do I know? The deed in lieu of foreclosure will get you out with a significant hit to your credit. But not as bad as a foreclosure. Maybe you can work a short sale with the lender instead. That way they don't have to manage the property after you leave. Still hurts your credit, but that is survivable. Sorry to hear about your problem, good luck with solving it.
  3. There is no law that will allow you to give it away (back to the bank?) without hurting your credit. Actually there is no way out of this without some kind of credit damage (well, there is, but it means making your monthly payments for as long as you agreed to do so 3 years ago when you signed for your condo). I don't know where you are in Florida, but it is going to matter. There are some regions of FL where many banks have stopped writing mortgages on condos because the value is falling too quickly. They can't get an accurate fix on value, so they won't write a mortgage. This is primarily true in Southern Florida, near Miami. Your absolute best bet would be to sell the condo for something close to $180k. Even if you had to come up with the closing costs or something to get out, you'd be in better shape if you could sell. I am guessing that you won't get a bank to agree to a deed-in-lieu of foreclosure in southern FL. You can ask for that (from the loss mitigation department) or a short sale (where the lender agrees to take less than owed and it will satisfy the debt). The other answers are right that you have to get them to agree not to come after you for the remaining balance otherwise you will have a foreclosure and a bankruptcy on your record in short order. The other issue is that money forgiven in this way is treated as ordinary income for tax purposes. The federal government has recently waived it's tax for this purpose (for a limited amount of time), but many states haven't. You are in for a rocky time. I hope it works out as well as it possibly can for you. good luck! ps - If you had a roomate could you afford it? That might be your best option until housing stabilizes in FL.
Powered by Yahoo! Answers