Can You Sell Your House Back To The Bank In Pennsylvania?
If you’re asking yourself: “Can you sell your house back to the bank?” then you probably already know:
Banks don’t like owning houses.
It’s that simple. They are businesses, not homeowners.
Instead they like to lend money to people who wish to own a house in exchange for interest and fees. This type of loan is what many refer to as a mortgage.
So the answer might be plain and simple:
Yes, it may be possible to sell your house back to the bank in Pennsylvania. But it requires loads of cooperation, permission and acceptance to do so. Good luck obtaining all of that from your bank.
And on top of that, selling back to the bank may not be your best option. Although it can help avoid a foreclosure, it often means selling at a steep discount and taking a lose that can permanently sting your credit report. Additionally, if a deal is reached, it’s usually on terms and conditions set by the bank and not you. You should not expect to come away from that type of transaction unscathed.
So if the bank doesn’t want to buy your house, which many do not, then what options are you left with?
Let’s walk through them.
- Banks are in the business of lending money to home buyers, but they do not like to own property themselves.
- Selling your house back to the bank is a difficult and painful process. Many banks do not entertain it.
- There are alternatives to sell your house under better terms and conditions.
Table of Contents
- Can You Sell Your House Back To The Bank In PA?
- How Do I Get Out Of My Mortgage?
- Does Deed In Lieu Affect Credit?
- Why Banks Don’t Want To Foreclose
- How To Walk Away From A Mortgage Without Ruining Your Credit?
- What Are The Consequences Of Walking Away From A Mortgage?
- Sell Your House To A Reputable Buyer Instead
- Sell Your House Back To The Bank FAQ
How Do I Get Out Of My Mortgage In Pennsylvania?
This is the question that probably surfaced before you asked “can I sell my house back to the bank?”.
If you’re asking this question, you may be in any or all of these situations:
- You can no longer afford the mortgage payment.
- You stopped making payments and are now behind.
- You are facing foreclosure due to unpaid loan payments.
- Your house is worth less than what you owe.
Do you fall into one of those scenarios?
If you nodded your head, then great. The first step is realizing it.
The second step, is letting my research within this article help you find a better solution.
Now that we know you and your mortgage are not compatible, how do you go about getting out of it.
The only way to absolve yourself from the obligation of the loan is to sell the property and payoff the full balance with the proceeds. Unless you have a large lump-sum gift or inheritance coming in from that great uncle of yours, then you probably need to sell.
Many people think that the cleanest and easiest thing to do is to just sell the house back to the bank that lent them the money to purchase it in the first place.
In practice, it’s an awful idea!
The concept is technically called a Deed In Lieu of Foreclosure or “Deed in Lieu” for short in Pennsylvania.
Used by some as a last resort before foreclosure auctions, it can be effective in rare instances. For every other case, it’s a poor choice.
When you deed your house back to the bank, which is the same thing as selling your house back to the bank, you essentially are claiming defeat.
And your lender knows that.
They smell the blood in the water and they will maximize the opportunity.
As I stated above:
Banks are not in the business of owning homes. They are in the business of collecting fees and interest from loans they issue to homeowners.
If they actually cooperate and provide you with an offer to buy back your home, through a “deed in lieu” situation, it only means that there is a substantial profit for them to do so. Otherwise, they will let it go to foreclosure where they can get more for the property or acquire it anyways.
In summary, you probably don’t even have the option to do a deed in lieu of foreclosure. If you do, and the bank cooperates with an offer, it’s probably not in your best interest to take it.
Does Deed In Lieu Affect Credit?
You might be thinking, “but wait, if I do a deed in lieu then won’t it protect my credit as opposed to getting a foreclosure on my record?”
While anything is better than getting a foreclosure on your credit, a deed in lieu or short sale will also show up on your credit report in PA. To the extent they show up differently or less, we will never know the true impacts.
The better question to ask is:
Why even bother with anything impacting your credit?
Your personal credit is your lifeline for borrowing money in the future. It applies to credit cards, vehicles, real estate and many other large purchases.
When you decide to sell your house, don’t sell it back to the bank – sell it to someone who will pay your what you want, close on your timeline and execute on terms that are reasonable. Sell your house without impacting your credit.
Why Banks Don’t Want To Foreclose
Picture yourself in the shoes of the banker.
You’re running a streamlined business that lends money to borrowers and collects interest each and every month.
Then one month, a homeowner stops paying. Not only do they owe you for the month they just missed, but their outstanding balance is hundreds of thousands larger than that.
What can the bank do?
They could foreclose. But do they really want to?
Foreclosure comes with a ton of overhead and expenses:
- Attorney costs
- Pennsylvania Court fees
- Realtor fees
- PA Auction fees
- And the list goes on…
The end result is that the bank ends up owning the house. The homeowner stopped making payments and now the bank has repossessed the property.
Now they need to sell it to get their cash back…the cash they originally lent to the homeowner. Here comes more fees, holding costs, taxes, realtor fees, and so on.
At the end of the day, the bank just wants borrowers to make their payments, with interest of course, on time. They really want nothing to do with owning your house or any house for that matter. A bank foreclosing on a house is a worst case scenario for them. It’s a lose prevention exercise, not a business opportunity.
This is another great reason you don’t want to sell your house back to the bank. If you do, you can expect that they will pass on all of those costs to you in the price they negotiate. If you can, avoid selling your house back to the bank.
There are some better options you can consider.
How To Walk Away From A Mortgage Without Ruining Your Credit?
Well, for one, don’t just literally walk away.
That would be a whole lot of trouble you don’t need.
However, there is an option to step back from paying and dealing with your mortgage that does not negatively impact your credit…and that is to sell your house in Pennsylvania.
Additionally, if you have very little equity, you might be wondering how it is even possible to sell the house and walk away without cutting a check to your lender.
It is possible.
My team and I do it all the time for homeowners in Pennsylvania and surrounding areas.
For sellers who are either behind on their mortgage or have very little equity that wouldn’t cover their selling costs, we can take over your loan “subject to” and catch up all of your arrears.
This type of deal is very common for us to do because it let’s us pay full-price for your house, it protects your credit from a foreclosure or short sale and over time it actually builds your credit up as we make payments on your behalf.
Many homeowners come to us looking for a way that they can just walk away from their mortgage without losing credit. This is the best option for them.
Is it an option for you?
Find out by requesting to contact us. My team and I will be in touch shortly.
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What Are The Consequences Of Walking Away From A Mortgage?
- Negative hit on your credit score and report
- Liens placed on your property and against your personal name
- Creditors following you for the rest of your life
- Losing your home to foreclosure
- Limited ability to ever borrow money again
- Lose of all the equity you built up in the home
- Removal of occupancy by the Pennsylvania State Sheriff
And the list keeps going on…
Don’t walk away from your mortgage. Call us instead and we can help get you back on track!
Sell Your House To A Reputable Buyer In Pennsylvania
If you made it this far, then you already know how dire it can be to just walk away from your mortgage or sell your house back to the bank.
Avoid it at all costs!
Instead, you might be better suited by selling your house directly to a home buyer in PA.
Homebuyers are professionals. They deal with mortgages, foreclosures, and houses all the time. Your situation will not be intimidating or challenging to them. To a realtor, it could be.
Homebuyers also are not realtors so they do not charge you a fee. For sellers who want to sell their house back to the bank, this is huge! Imagine selling your house without paying a commission.
Homebuyers are also seasoned at creative deal constructs. In this article I scratched the surface on some deal structures that could help get seller’s more money without dealing with the headaches that banks and lenders bring about.
Homebuyers are a great option. If you think so too, request an offer below:
Get Your Cash Offer Today!
Sell Your House Back To The Bank FAQ
Does a short sale hurt your credit?
Yes! So does foreclosure, deed in lieu (selling back to the bank) and many other bank related sales. The only home solution that does not is selling it directly to an investor.
What is a friendly foreclosure?
This is another name for deed in lieu or basically deeding your property back to your lender (i.e., selling your house back to the bank). Sometimes your lender will give you money, many times they won’t. Read you contract to understand the details!
What is it called when a bank takes back a property?
This process in Pennsylvania is called foreclosure. If you’re “in foreclosure” then you still have time before the bank repossesses your house.
The findings and information in this article are focused on Pennsylvania, however, it is applicable in many locations nationwide!
Best Way To Sell My House Back To The Bank PA
Signature Properties provides the easiest and simplest way to sell your house in Pennsylvania. We buy houses through fair and honest cash offers.🙂 Whether you are avoiding the bank from foreclosure, coming into an inheritance, going through divorce or any other situation – we have real estate solutions to get you the outcomes you desire when you sell your house to us. We help homeowners with costly home repairs, mounting liens, code enforcement violations and even vacant homes. Are you trying to sell your house in surrounding areas or other counties and states near Pennsylvania? We buy properties in New Jersey and Delaware as well as many other towns! In fact, we buy homes all over Pennsylvania. So if you’re still looking for an answer to “can you sell your house back to the bank?” then by now you probably have one!