What happens to your house when you surrender it to the bank?

HomeWhat happens to your house when you surrender it to the bank?
What happens to your house when you surrender it to the bank?

When a home is surrendered, a foreclosure will ensue — but only as a means of clearing title so the bank can sell the home. In a foreclosure that takes place outside the context of a surrender, the borrower can end up owing the difference between the mortgage amount and the sale price the home fetches at the foreclosure sale.

Q. What is reverse foreclosure?

A reverse mortgage foreclosure is when a lender requires full repayment of a reverse mortgage loan balance due to a “triggering event,” such as the death of all of the homeowners. Most borrowers choose a Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA).

Q. What type of foreclosure is sometimes called friendly foreclosure?

deed in lieu transaction
A deed in lieu transaction is what is commonly referred to as the friendly foreclosure because it is often less damaging to the homeowner than a traditional foreclosure.

Q. What’s the difference between foreclosure and surrendering a home?

When a lender forecloses on your home due to non-payment, they take the home from you. The primary difference between surrendering a home and foreclosure is the possibility of owing money after the sale.

Q. What does it mean to voluntary surrender a home?

The voluntary surrender of a home in the manner you describe is often referred to as a “deed in lieu of foreclosure” in the mortgage industry. In this procedure, a borrower negotiates with the lender to turn over the deed to the lender in order…

Q. When do you have to surrender your property in bankruptcy?

Thereafter, in their Chapter 7 statement of intention or Chapter 13 plan for reorganization, borrowers indicate an intention to surrender the mortgaged property. The automatic stay imposed by the bankruptcy court is then lifted or the trustee abandons the property, and the lender proceeds with its foreclosure action.

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