But they are going to lose anyway, and a refi might be a way to keep the loan open. The last thing a bank wants to do is foreclose. It's worth asking. After all, a cheap phone call on Skype is all that it will cost.
The problem with moving money out of the US and then turning in the keys is that means foreclosure, and a debt to the US equal to whatever the loan forgiveness works out to be. That debt will never go away, and interest and penalties will climb and climb. If the OP never intends to return to the US, he might be OK. But moving money out of the country just before abandoning the property will probably be construed as a deliberate fraud. Unless, of course, he can come up with the money to pay the tax. That might be the cheapest option, because the income tax on, say, $110,00 will be less than $7000, if that is the only taxable income for the year.
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