Latest Posts
Home > Ask The Get Out of Debt Experts > How Does a “Mortgage Release” Work to Let Us Hand Back Our House. My Husband is Active Duty Military.

How Does a “Mortgage Release” Work to Let Us Hand Back Our House. My Husband is Active Duty Military.

We can’t make our payments, applied for a modification over a year ago. Paid trial payments and the first couple of regular payments, then received a notice from the mortgage co. that they were mistaken, and the mod had not actually gone through.

I stopped making the payments as they were not being credited anyway. I finally heard from them the last week of Dec. that the mod booked, but we were already 3 months behind… Can’t catch up, I’m done trying and just want to be done.

Now they are sending me info on “Deed in Lieu”, a Mortgage Release program. They are telling me we “could” get approved to continue to live here for up to 6 months for “about” $103.00 per month. And we “could” qualify for assistance to help us relocate.

I don’t trust them, I’m afraid if I agree to this, my son and I will be out on the street. My husband is military and is stationed in Germany, so I have no way to physically move us until May, when he returns. I’ve tried calling the # they gave for assistance with no luck. I’ve went to the website they referred me to, knowyouroptions.com, but it also uses words like “can, could, and may”.

They say it’s a better option than foreclosure but I think with a foreclosure we might have more time before we have to move, I’m hoping for enough time to wait for my husband returns. Any advice?

Lisa

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear Lisa,

If your husband is active duty military there may be another way to keep you in the house. Under the Servicemembers Civil Relief Act the lender is prohibited from foreclosing.

The SCRA (50 U.S.C. App. § 533) protects members against foreclosures of mortgages, deeds of trust, and
similar security devices, provided the following conditions are met:

  • The relief is sought on an obligation secured by a mortgage, deed of trust, or similar security on either real or personal property;
  • The obligation originated prior to entry upon active duty;
  • The property was owned by the member or dependent before entry on active duty status;
  • The property is still owned by the member or dependent at the time that relief is sought;
  • The ability to meet the financial obligation is materially affected by the member’s military service.
  • The action is filed during, or within 90 days after, the SM’s period of military service.

Mortgage lenders may not foreclose, or seize property for a failure to pay a mortgage debt, while a service member is on active duty for 9 months grace period prior to December 31, 2010 unless they have the approval of a court.

However, if your lender is willing to put the program you’ve outlined in writing then it would seriously worth considering. Most importantly the program must contain a waiver for any residual liability you may have for the loan if you agree to hand the house back. We don’t want them coming after you loiter for a balance owed on a home you no longer have.

The premise of the program is reasonable. I’ve seen other lenders offer similar programs where they would rather have someone stay in the house and keep it up than let it sit empty and potentially be damaged.

Even empty the house has carrying costs and obligations for the lender so why not let you stay in it for now.

I’d be interested in seeing any documentation on this program the lender may have given you.

If you’d like to discuss this with a local HUD Housing Counselor their services are free.

I agree with you at the moment, there are a lot of colds and maybes still floating around. I would suggest you continue to pursue this for more information, talk to a HUD HOusing Counselor and keep me posted.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

How Does a Mortgage Release Work to Let Us Hand Back Our House. My Husband is Active Duty Military.
Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

How Does a "Mortgage Release" Work to Let Us Hand Back Our House. My Husband is Active Duty Military. by

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Jason

    I feel your burden.  I am active duty military and am feeling the crunch as well after having PCSed and still owe on the mortgage

  • Lisa Brown

    Thanks Steve! I tried the HUD housing counselor, they can’t talk to me until I fax  them a copy of our POA. I’ll try again next chance I have to get to a place where I can use the fax. I will keep you posted!

    • http://GetOutOfDebt.org Steve Rhode

      Lisa,

      I feel like there is a good solution here that will assist you to accomplish your goals. Please do keep me posted.

      Steve

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.