There are ALTERNATIVES that allow you to keep the house such as: part 9

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. You may be able to keep your home if you file for Chapter 13 Bankruptcy Protection. You must be able to afford the payments.

In situations where you do not want to keep the home, the following alternatives may be available to you. These options will affect your credit rating less than a foreclosure will.



If there is sufficient equity in the property, you may be able to sell the home, payoff the mortgage(s) and walk away with money in your pocket.


Even if you do not have an assumable mortgage, some mortgage companies will allow your buyer to assume your mortgage and take over your payments. FHA loans are usually assumable. If your mortgage company approves the buyer's credit, you will obtain a release of liability and transfer ownership of the house to the new buyer.


This alternative allows the property owner to deed the property back to the mortgage company so the mortgage company can pursue selling the property. For this to be legally binding the lender must agree. The homeowner can avoid legal fees, but receives no equity from their home. Often a mortgage company will only consider this alternative as a last resort.

Comments (2)

Brad Clemons

Great posting.  I would like to comment on the loan assumption piece.  I am a co-founder of HomeAssume.coom.  It matches buyers and sellers to help people use the assumption clause to help sell their homes.  All FHA and VA loans are assumable as long as the buyer credit qualifies.  As you said, some companies will allow the mortgage to be assumed just to keep the loan servicing on their books and not have a non performing asset.  Many loans that were originated in the last 5-6 years will also have a lower than current market interest rate.  We recently had an article written about us in The Denver Post and will provide an example of how we can help people avoid foreclosure and save money.

Sep 04, 2008 09:08 PM
Maya Thomas, Broker
Tampa, FL
Please see my client recommendations.

Bankruptcy is sometimes the best thing to do to keep a home.  It's a big pill to swallow, but the end result can be life changing. 

Mar 08, 2010 05:31 AM