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Anybody walk away from their mortgage?

#21
MJ5150 said:
Call your mortgage company first thing Monday morning and tell them what you told us, even admit you are thinking of walking.

-Mike
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This is actually an EXCELLENT idea. Knowing this they may actually help you. If they tell you there is nothing they can do they are liars.

If you are left with no choice but to walk, try and buy another house in the location you are moving to first. If you can pull that off your credit will be just fine by the time it actually matters again.
 
#22
call your mortgage company, tell them you want to do a short sale, they wont lose a penny since they already made thousands from you. They will tell you your credit score will be hit, dont worry , save money and buy in cash.
 
#24
If it's only $10K underwater, I wouldn't walk away.

The penalties you will pay for walking away, directly and indirectly, for the next 10 years or so will exceed $10K.

Now, some people are $100K+ underwater. It begins to become more plausible to walk.
 
#25
dmonroe said:
If you can pull that off your credit will be just fine by the time it actually matters again.
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Not necessarily. The impact can be pretty great and many time your credit card companies will cancel your cards or greatly reduce your lending limit. And if the need to move comes again in the next 5 years it can even make renting difficult. I know someone that recently went through this.
 
#26
pedroims said:
call your mortgage company, tell them you want to do a short sale, they wont lose a penny since they already made thousands from you. They will tell you your credit score will be hit, dont worry , save money and buy in cash.
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Your credit is hit almost to the same extent as walking BUT the length of time that it takes your credit to recoup is much less with the short sale.
 
#27
chris4001asat said:
Here's the background. I'm 42, and I have a wife, a 9 year old, and a 7 year old, so it's not just about me. I've been at my job for 15 years. I can't say I love it, since it doesn't involve playing bass, but I definitely like it.. a lot. I'm making more than I ever thought I'd ever make, not to mention 6.5 weeks of vacation, matching 401k, great health insurance. A few years back, in the middle of the housing slump, we bought a house. Things were going good. Just got word a month ago, my job is moving. They are buiding a new facility in Chicago. They offered me a job there. I know I'm at least 10K underwater in my house with the continued decline. All I keep hearing is the bad job situation here in Toledo.
If I stay, I will take at least an $8 an hour pay cut wherever I go. So there's a good chance I won't be able to make my payment here anyway.
:help:
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If they are offering you a job they can't help with relocation?
 
#28
SolarMan said:
This American dream is turning into a nightmare for so many people. It makes me sick to think that people end up in situations like this through no fault of their own.

I know some older people that made a killing in real estate because they thought that they were so smart. It was luck.

I know some younger people that have lost everything because they did exactly what these older people did. It was bad luck.

Man, I feel for you - and I would be proud to associate with a hard working father trying to do his best for his family.

I pray you get some good sleep. You sound like a good man in a tough situation.
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Thanks MystikMichael and Solarman.....Literally the week before I found out, I was starting to finally plan a Disney vacation. I'm glad I didn't actually book flights yet...
 
#29
I am losing my house due to divorce. It's underwater by about 30k as well. I am waiting til they give me notice of sheriffs sale, then filing bankruptcy. If i didn't file bankruptcy, they would come after me for the difference of what I owe after it sells at auction. Example: I owe 80k on mortgage, house sells at auction for 40k, I owe the bank the other 40k. There's no option to just "not pay them", they will sue you (and win) and will garnish your wages until it is all repaid. Plus it's a big slam on your credit rating. You may not even be able to rent if a potential landlord pulls your credit rating and sees you defaulted on your mortgage.

If I were you, I'd sell it for what you can and pay back the remaining amount. Yes, it sure does suck (especially because the banks that we owe our mortgage to directly contributed to your house being underwater) but it's better than what I listed above.
 
#30
pedroims said:
call your mortgage company, tell them you want to do a short sale, they wont lose a penny since they already made thousands from you. They will tell you your credit score will be hit, dont worry , save money and buy in cash.
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+1


The mortgage company would much prefer this to you walking and them suing you and so would you. As for your credit score taking a hit, that has happened to millions of people since 2008, and you will find ways to manage.
 
#31
notverygood said:
Every store or shop you've used over the years has broken contracts when the financial costs of staying in a contract are more than the penalty for breaking a contract. Our employers do it, our banks do it, our govt, etc. Why be so harsh on one person when we accept it daily in the business world? The company I work at does it on almost a daily basis with trucking companies. They hire small firms that can't fight back.
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+1,000!

Although I think the OP should work it out with his mortgage company, I have no problem in principle with walking out on the mortgage. The only people who get dumped on for breaking contracts are small businesses and individual consumers. The moment you or your company has enough money, the rules change drastically.
 
#32
hbarcat said:
I heard of a recently enacted Federal program that was designed specifically for people in your situation. You're supposed to sign up for it and then you will have some kind of process to follow that allows you to work with your bank to lower your monthly payment by reducing the interest and perhaps even reducing the actual principal. It also should grant you a certain amount of amnesty for missed payments among other things.

Don't know what the program is called or if it's worth pursuing, but I'm just repeating what I heard on the news a couple of weeks ago.
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+1

Don't know how closely the OP has been following the news, but very recently the federal government negotiated a partial settlement with the home mortgage industry that provides for a significant amount of relief for homeowners, taking the form of principal reduction, possible mortgage forbearance, and other measures. Definitely worth looking into...

Dr. Cheese said:
The only people who get dumped on for breaking contracts are small businesses and individual consumers. The moment you or your company has enough money, the rules change drastically.
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Got that right. The worst thing in America is to be poor - because you've got no power, got no clout.

But if you've got enough money, they'll write the rules - and the laws - to protect you, and to accommodate you. If the rampant, widespread - yet unpunished - crimes on Wall Street (and the subsequent crashing of the economy) has taught us anything, it is this... :rolleyes:

MM
 
#33
Kentucky Ryan said:
did you agree to pay your mortgage? if so, if you walk away from it . . . you are not someone i would want to associate with.
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I've known many good people whose financial situation collapsed during the financial crisis. They've lost jobs, income, their homes, and in some cases their families.

I purchased a home in 2010 for $295,000 (I live in California) that same home was purchased in 2007 for $540,000. The people who walked away were a military couple stationed at a local airbase who were transferred to another state. Didn't seem the government or banks supported our military personnel in this situation.
 
#34
Regardless of your decision, I wish you and your family well. It sounds like you are just how I'd be, stressed and sleepless. It will all work eventually with probably some tough decisions, the key is keeping the stress from the kids if at all possible. Good luck.
 
#35
As hbarcat said, there is a federal program (actually more than one) designed to help underwater borrowers. You may be able to get a loan modification (either a lower interest rate, a reduction or forbearance of principal, or both) that will help.

In any case, I highly recommend getting all the facts before deciding to walk away, especially if you are in a recourse state. The link below goes to a list of HUD-approved counselors who will be able to help you figure out what your options are and the consequences of each.

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Hope it works out well for you. Good luck.
 
#36
The "moral" issues about walking away from a mortgage are pure BS. There are none. Your contract for the loan spells out the terms if you do not or cannot meet the payments. Businesses do this all the time, but try to make mortgages a huge moral issue to keep the masses from doing what they do.

The legal and financial issues are different. You should look into those. What can you honestly sell the place for? What would the bank sell the place for after a foreclosure? Would they come after you? Would bankruptcy be an option? You should see about having a discussion with a lawyer who specializes in this.
 
#37
Naver thought in the land of milk and honey that the american dream would slolwy fade away makes me afread for my kids future some of the banks and mortage company should be more responable and work with people they can if they want would make america a better place right now ...
 
#39
The easiest way is to go bankrupt and surrender the property. Even then, you still have responsibilities for the maintenance of the house until the Bank takes ownership. This is how it went down with me. Walking away can be risky. I'd advise a (ugh) Lawyer's advice.
 

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