Can I walk away from an upside down home to buy a new one due to medical reason?

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Can I walk away from an upside down home to buy a new one due to medical reason?

I have a 2 story home, all bedrooms upstairs. My parent who’s living with us is not in good health to be going up and down the stairs anymore. We are thinking of buying a one story home or one with bedroom downstairs. It is cheaper to buy than to modify our current home that is upside down which rate will change in 4 years (variable rate).

Asked on January 6, 2012 under Real Estate Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I am so sorry for your situation.  Unfortunately the bank or lending institution for your home will not recognize that reason as valid to walk away from the obligation of the mortgage.  In fact,they do not recognize any reason as valid.  You need to either modify and sell or get their permission for a short sale with them waiaving the deficiency - very important.  You can possibly use the medical problems of your parents as a reason to push a short sale because you must have their approval first.  Once the house is sold you can purchase a new one that better fits your needs.  Good luck.


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