Reducing Mortgage Amount To Value Of Property

2008-04-21   minute read

You could try to negotiate this with the lender, but chances of success are very low. This type of negotiation after filing a bankruptcy is often very successful with things like a loan against household goods - the lender knows that because of the bankruptcy, the most they will ever recover is the value of the goods.  However, it’s very difficult get a mortgage lender to reduce the debt on a condo or house, even after a bankruptcy has occurred. Reducing the mortgage amount doesn't really give the lender anything of value that they don't already have. So, most lenders will always prefer to take their chances that the value of the condo will increase over time and they won't agree to reduce the amount you owe them. In some very limited situations, it may be possible to reduce the mortgage amount by filing aProposal to Creditors. You would need to discuss your particular situation with a trustee to see if this would work for you. However, if you filed a bankruptcy or proposal and chose to move out of your condo, you would not have to pay anything further on the mortgage. The mortgage lender would foreclose on the condo and sell it, but could not ask you to pay any shortfall. Feel free to get in touch with me if you have any further questions. Judy Scott - Port Moody - Vancouver - Abbotsford - 604.949.2100. [email protected] Back

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