Legal Question in Real Estate Law in Michigan
Mortgage Default
If I default on paying my mortgage for my home, owing a first and second mortgage on the home, can I give up the house to the first mortgage holder and walk away free and clear of responsibility?
1 Answer from Attorneys
Re: Mortgage Default
First, if you have PMI, Private Mortgage Insurance, on your primary mortgage even if you "give up the house" they may come back on you for the loss that they will incur in paying off the mortgage company.
In addition, if you do give up the home the mortgage for the 2nd is no longer attached to the home, but still remains an obligation of you and any co-borrower. So they may try to file suit and collect on that. Often an option is to sell the home "short" with lender approval and reach a settlement agreement with the lenders.
If you have questions feel free to contact my office as we are negotiating short sales with lenders to the benefit of borrowers and buyers. www.SevickLaw.com
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