Options for mortgage after discharge
You have a number of options. Below are a few options:
If you didn’t sign a reaffirmation agreement, you can simply walk away and let the mortgage companies foreclose on the property (remember, you should continue to insure the home and pay HOA fees until the home is complete foreclosed and the title is out of your name). If you chose this option, you should speak to your tax specialist to determine if there are any tax consequences in foreclosure.
You can do a short sale. This is more work on your part as opposed to letting the home go into foreclosure. Short sales tend to benefit the real estate agent and everyone else involved. However, your real estate agent might give you a cut of the pie (like above, you must continue to pay HOA and you should keep your home insured. Again, speak to your tax specialist to determine the tax consequences of doing a Short Sale
Deed in Lieu of Foreclosure
You can try to do a deed in lieu of foreclosure so that you don’t have to worry about the HOA fees and insurance. However, many mortgage companies don’t want that responsibility either. Again, speak to your tax specialist to determine the tax consequences of a deed in lieu.
You can also rent the home out while the title of the home is still in your name. If you already left the home, the extra rent money for the time being can help you get caught up on other bills. As above, renting the home will be considered income. This will also effect your taxes.
You can stay in the home and live mortgage/rent free until the home is foreclosed on. However, you should pay the HOA, taxes and insurance before the house is foreclosed on.