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After BK7 walk away, short sale, or deed in lieu?

Posted on: 24th Aug, 2011 04:42 pm
here is my situation and then question. we are a bk7 with a primary mortgage and a rental property. the rental was foreclosed on without issue during the chap. 7. we retained the house on the pay to retain program, but it was still included in the chap. 7. we are upside down $230k. we have a second mortgage with a $90k balloon due in 9 yrs. we live in a neighborhood that is still being developed with new homes being built right behind us for literally half what we owe on ours. since we are chapt. 7 and the mortgage was discharged is there any benefit whatsoever in trying to conduct a shortsale, or pursuing a deed in lieu? both of these would recquire the 2nd place mortgage holder to simply release or forgive that note ($90k) and then the process of listing the property for 90 days, and either finding a buyer and or receiving permission for deed in lieu. but based on remarks in this forum, if we simply walk away there is no more negative affect on the credit than what the chap. 7 did and we are already at 680 less than a year out of bk7. so if there's nothing more negative of an impact then why would we pursue a forgiveness on the second, and go through the headaches of a short sale??
hi semm,

whether you go for a deed in lieu of foreclosure or a short sale, the lender won't be able to come after you for the deficient balance resulting from the sale of the property. so, rather than simply walking away from the property, it will be better if you surrender the property and move out of it. as the second mortgage will also be discharged, the lender won't be able to come after you for any dues.
Posted on: 24th Aug, 2011 07:44 pm
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