401k Loan Problems?

Joe took a loan against his 401k in order to keep up with the payments on the house that he's been trying to sell.

QUESTION: Joe and his wife have a home in Dallas that they have tried to sell.  He’s taken a loan against his 401-K to stay current with the payments while trying to sell it.  They have no more money to pay for the house in Dallas.  What should they do?

ANSWER: You need to do a deed in lieu of foreclosure.  Make sure you do this without recourse.  Otherwise, they will sell the house way below the value and come after you for the rest.  They will sue you unless you do the deed in lieu of foreclosure without recourse.