Probably not. When you got the loan, you signed a promissory note as well as a deed of trust or mortgage. The lender likely has four approaches it can take (assuming it is a deed of trust and not a mortgage -- if it is a mortgage, the first option is not available). First, it can nonjudically foreclose the deed of trust (which takes about four months), in which case it gets the house and that's it. Second, it can judicially foreclose (which can take 18-24 months), in which case they can also get a judgment against you personally for the difference between what you owe and the value of the house. Third, it can elect not to do a foreclosure and instead just sue you personally for the full amount of the balance of the loan. Fourth, it can do some kind of "workout" with you. Depending on the lender's willingness to work with you, this could involve restructuring your loan.
You should open up a dialog with the lender if you think you may be going to default. This proactive approach usually makes the lender more willing to work with you. After all, they don't reallyh want the house, they just want to get their money back.
You should also discuss your specific situation with an attorney experienced in this area who can help you better understand your choices.
Regardless, it will affect your credit.
PLEASE BE ADVISED: This answer and any information contained herein is not intended to be treated, and should not be construed, as legal advice. Rather, this answer is offered solely for general information purposes. This answer does not create an attorney-client relationship, nor does it create any kind of legal relationship, duty, or privilege. This attorney is licensed only in Washington.
