As a real estate and finance expert with years of experience in the industry, I've seen a variety of scenarios where individuals consider selling their house to a bank. This is a complex process and it's crucial to understand the different types of mortgage loans and their implications.

First, let's define what it means to "sell" your house to the bank. In most cases, this refers to a situation where a homeowner is unable to make their mortgage payments and decides to surrender the property back to the lender, which is typically a bank or financial institution. This process is often referred to as a "short sale" or "foreclosure," depending on the terms of the mortgage agreement and the laws in the jurisdiction.

Now, let's delve into the specifics of a recourse mortgage loan. A recourse loan is a type of mortgage where the lender has the right to pursue the borrower for any deficiency balance after the property has been sold. This means that if the sale of the property does not cover the full amount of the mortgage, the lender can seek to collect the remaining balance from the borrower. This can include additional fees and legal costs associated with the sale.

In the context of a recourse mortgage, selling your house to the bank is not as straightforward as simply handing over the keys and walking away. The bank may sell the property at a price that is less than the outstanding mortgage amount, and you, as the borrower, could still be held responsible for the difference. This is a significant risk and can lead to further financial hardship.

However, not all mortgage loans are recourse loans. There are also non-recourse loans, where the lender's ability to pursue the borrower for a deficiency balance is limited or non-existent. In these cases, if the property is sold for less than the mortgage amount, the lender typically cannot come after the borrower for the difference. This can provide some relief for homeowners who are struggling with their mortgage payments.

It's also important to consider the impact on your credit score. Selling your house to the bank, particularly in a foreclosure situation, can have a severe and long-lasting impact on your credit. This can make it more difficult to secure loans or credit in the future.

Before making any decisions, it's advisable to consult with a financial advisor or a real estate attorney who can provide guidance based on your specific circumstances. They can help you understand the implications of selling your house to the bank and explore alternative options that may be available to you.

In summary, selling your house to the bank is a decision that should not be taken lightly. It involves understanding the type of mortgage you have, the potential financial implications, and the impact on your credit score. It's essential to seek professional advice to navigate this complex process and make the best decision for your situation.

read more >>

If you have a recourse mortgage loan, however, the scene shifts. Recourse borrowers owe the full amount of the mortgage even if they deed the house back to the bank. The lender can sell the house for less than the mortgage amount and come after you for all the rest, plus fees and legal costs.Jun 16, 2010read more >>