Can You Ask the Lender For Mortgage Forgiveness?

A reader asks:

Hi Guru- I am loosing thousands to interest every month on a home I built to sell. My primary residence was mortgaged to get the funds to build. How do I ask for mortgage forgiveness from the lender?

I’m not sure you can really ask for mortgage forgiveness in this situation. Regardless of the circumstance I do not know of any lender that would forgive a mortgage. When people talk about mortgage forgiveness they’re talking about a foreclosure, short sale or some form of debt discharge wherein the mortgage company cancels the loan. As you can imagine there are legal and financial consequences associated with this process.

In your situation I don’t think there is any other option other than to sell the property for whatever you can get and to take the loss. You can still call the bank and see what they can do for you. However, since you’re facing difficulty due to an investment decision, the bank will simply view it as something which didn’t work out. 

I wish I could give you a better answer, but that is the only option I can imagine. Good luck!

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