Staying Current With 401k Loan?

Joe and his family have cashed in their retirement to keep their home.

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.