A little over a year ago, I moved from Iowa to Texas for work. My company had signed a contract with me that they would purchase my home for the appraised value if it did not sell after 90 days. Well long story short, they found a loop hole and backed out of the purchase in April. I have not made a payment since them. I have been working with C.Financial on a Deed in lieu of. But Nothing has happened for several months. So I called them and asked the status. They said there is a lean on your house and they cannot do a Deed In lieu of until it is removed, so they said they were going to move to forclosure. I knew nothing about this. Turns out it is a $400 medical bill my son incurred in Iowa. So here is my questions.
1. I have a second mortage with the same company for a new sewer system - $13000. If I do the DILO I will still have to pay the Home equity loan off. If I let it go to foreclosure what will happen with that loan?
3. I am a resident of Texas. I have been told by an attorney that I am protected by Texas law now and the mortage holder cannot get anything from me. True?
4. I will of course pay the lean off in the next week or so. I want this to end and it seems the bank is in no hurry. what are the pros and cons of doing the foreclosure and just sending them the keys, and registered letter stating that I am canceling the insurance in thirty days and the house is theirs? Can I do that?
any help would be greatly appreciated.