We have a house with a 180k 1st mortgage (Huntington) and 55k 2nd mortgage (PNC). Each is from a different company. The house just appraised at 190k. I'm being transferred by my employer from Michigan to Texas. I have decided to keep my job and accept the transfer even if it means I have to lose the house. How should I handle the mortgages? I have not talked to either mortgage company yet, but is there any chance of the 2nd mortgage releasing the house as their collateral? If I have to default, what are the consequences? Anything else I should know?
Are you able to keep the house, rent in Texas and let your Michigan home out to some renters? If you can find a renter and rent something for yourself in Texas at a similar price, you should be able to keep making your repayments.
I believe that Michigan lies somewhere between a state like New York (where the lender has recourse to sue you) and California (where the lender has no recourse, and you can just walk away).
If your intention is to walk away without going bankrupt, you need to consult a qualified Michigan attorney.
This could be rare, but I know of one company that gave their employees the option of selling the house to the company as part of the transfer. I think it might be similar to a relocation package. Understand that the arrangement is not to make a profit; the employer makes the purchase at the loan value. You may want to inquire with your employer to find out if they offer options of this nature.
Have a local property management company send someone out to give you an estimate of how much you could rent it for. They take 10%, but it may allow you earn enough to pay off the mortgage without defaulting.