I walked out on a property because I received a letter that it was going to be sold in an auction, then I received letters that the loan was transferred to another bank. Can I negotiate with the bank for a modification even if I’m not in the house any more? I tried to get a modification with the first bank and they denied the modification due to low income.

Asked on March 8, 2011 under Real Estate Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

First, the bank doesn't care who lives in the house, or even if anyone does--all they care about is the loan. So not being in the house doesn't matter, IF you are still the owner.

Second, realize that even in the best of circumstances, it's completely voluntary on the part of a lender to negotiate--they don't have to. You can always ask, but they can say no.

Third, if you've already lost the house, it's too late too even try to negotiate--you have no leverage if the home as been foreclosed, since you are no longer the owner and the bank's already got your asset. If the home hasn't been foreclosed, then you can try, remembering that it's voluntary on the bank's part to negotiate or settle; that means you need to make a compelling argument for the bank, such as demonstrating that you'll pay whatever you can, or that the alternative is your declaring bankruptcy, reducing what the bank could potentially get.

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