Q: Can a person purchase a home and foreclose on their existing home due to it not selling? What are the penalties?
A:
The question is not quite clear, but it sounds like it asks whether if someone owns a property can they simply abandon it and let the lender foreclose? Technically yes, it is not as though a lender can force someone to stay in a home, but walking away will not erase the debt. The Lender usually has the right to pursue a deficiency judgment against the borrower, meaning they can get whatever money they are still owed after taking the house in foreclosure. Because foreclosure doesn't necessarily wipe away the debt and because it impacts one's credit, homeowners should think long and hard before just walking away from a property. Moreover, the homeowner will remain on the hook for things like property taxes, violations and such until the lender takes title (if ever).
I suggest talking with the Maryland hope hotline which answers homeowner questions for free about mortgages and foreclosures. You also may want to consult with an attorney to get detailed advice specific to your situation.
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