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Should You Walk Away From a House and Mortgage?

This article was written by in Real Estate and Home. 213 comments.


In the real estate boom, many homebuyers extended themselves financially to buy a house that may have been beyond their means. With the exuberant market, people were encouraged to buy with low introductory interest rates and interest-only loans, the belief that their income would increase to meet their payments, predictions that real estate prices would never fall. As should have been predicted, adjustable-rate mortgages have adjusted and monthly mortgage payments are higher and income hasn’t increased. More people have fallen behind with their mortgage payments.

With declining home prices and interest-only mortgages, more families owe more on their mortgages than their home is worth. Financially, it could make sense, at least in the short term, to walk away. In this state of negative equity, abandoning the mortgage and the house would actually be financially beneficial.

Here is why:

If the house you purchased for $400,000 is now worth only $300,000, but thanks to an interest-only mortgage, you still owe $400,000, your net worth increase by $100,000 simply by wiping the mortgage and the house from your balance sheet. Of course, if this is your primary residence, you still need a place to live. But from this point you could buy a more affordable house or rent for a while.

There is a major drawback to abandoning your responsibilities. If you walk away, you will trash your credit rating, making it more difficult or impossible to rent an apartment, qualify for a new mortgage, and perhaps get a job.

Freakonomics addresses this dilemma (if it is a dilemma at all):

My new wife and I bought our home in Temecula, Calif., as a place for us to start a family… We bought the house in early 2007 for $445,000 and put $50,000 down… Now that the market has crashed in our area, our house is worth about $250,000.

Although our monthly mortgage payments are high, we can still afford to make them, but should we? If we walk away and buy another house with my parents cosigning on the loan (or even just rented a place), we could save almost $1,000 a month in payments and maybe even have positive equity in the next few years. If we stay in our home, we’ll be stuck for many years, and if the market ever does get back to what we paid, the best option we’ll have will be to break even with a sale and then buy another house with an inflated value.

I’m certainly concerned about the ethical side of it, and know that walking away is not “the right thing to do.” But my question is from a purely economic perspective and I’d be saving a significant amount of money by lowering my monthly payments and erasing $140,000 in debt.

What should this family do? Are there ethical considerations, or is it simply a question of math? Credit rating aside, the financially responsible option may be to walk away, accept your mistakes, and start over. But if people can simply walk away from their obligations, what incentive is there for people to buy houses they can afford and work hard to continue making payments responsibly?

New laws are now in place to help families facing foreclosure, which should encourage people to choose options other than abandonment. But they may not help every family that finds itself in this predicament. What should they do?

Freakonomics

Updated January 12, 2012 and originally published February 20, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 213 comments… read them below or add one }

avatar Lippo526

Mortgage companies can not come after you for any part of the balance as long as the house is underwater. No court in the USA would hear the case. And in the .5% chance someone did, you can prove that the bank predatorily lended you the money case closed! You win walk away and live happy ever after!

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avatar Sallie

What do you mean, underwater? In the ocean or in delt?

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avatar Judy

upside down. I owe more than it is currently worth with a difference of about 20,000 now.

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avatar Colefor_me

Funny when banks first showed up historically farmers fought them. They knew it would be the end of owning your land. Banks would own them. Truth is you don’t own a property until the last dome is paid and deed is in your pocket. Then it can still be taken for non-payment of taxes. Banks are owned by the government under the federal reserve as a separate entity but no less controlled by the government.

The reason they send you pre-approved credit cards is to finish you off. Credit cards increase debt. They don’t want you to pay in cash or checks so interest can accrue on the credit because you’re spending what you don’t have. As a result, you can’t save any money because you didn’t have it in the first place. No one has truly owned their property in this country since banks, the government/taxes took over in the 1700′s. The U.S. is a plantation and everybody works for the government.

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avatar John

You are so very ture in you comment ! What ever happen to “Govnered for the people,by the people ! “

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avatar LarE

I NEED to comment here. I am a single widowed mom of four -3 grown and own their own homes. I bought my home (with my young teen daughter) 4 years ago (downsizing). I did not by fancy, or beyond my means and had a good job to pay the monthly payments but life changed. My new job pays less and I do NOT make it pay check to pay check. My interest rate (under the new Obama plan) went from 8.2 % to 5.4% and I still do not make it . I have no cable, my car is a 1999 and I am afraid daily that it will quit on me, my daughter and I live very simple. My mother has MS and proposed that MOVE together in a new home (one that would have an open floor plan for her) BUT if I sell me home I would be at at 28, 000 loss or more and that is A LOT for my single income to repay. It takes me 2 1/4 weeks just to pay my house payment now (my job cut hours a few weeks ago) and if I moved with my mom (to care for her) I would pay 1/2 of what I do now and we would share all other expenses. I am physically sick with ulcers because of my financial stress. Should I walk away?- (my credit sucks anyway). And when should I stop making payments? I am already in the hardship/Obama plan (that took 8 months of paperwork to complete) so I can not go to the lender. My mom can not move in my current home (home to small). I am so upset trying to do the right thing but I really can not see paying all this money when my current home is falling apart around me and my mother would pay 3-4x the monthly amount for an assisted living apartment if I did not move with her. I want to care for her , as she is still very healthy and just wants companionship. I want to know that she is safe. I am rambling but I wanted people to know that the decision to walk away is not always a selfish one. it is a difficult one. Suggestions are appreciated.

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avatar Anotherstuck

@LarE, You’ll see my post above if you look. It’s been quite a while since I spoke on here. Pretty much I did what was right for my family. The crime in that are got even worse. Someone stole my entire HVAC unit week before last…..the ENTIRE 1989 Train unit…..hell of a feat. I am still in the middle of short sales. First one fell through as the buyer backed out, and the second two are still around (one main offer, one backup). In order to do this, we had to stop paying our mortgage. They won’t even short sale unless you are 31 days behind in mortgage. When that happened, and the empty house was robbed twice again (another time they pulled my entire meter out of the back of my house….brilliant criminals), we just stopped paying our mortgage. We’ve done literally everything we could to get rid of that house, and were not going to put another cent of our money into the cancer. Could the new sort sale fall through because the HVAC was stolen? Sure…….Could the backup go as well? Sure……But now we’re not paying a THING for the house. There will probably be reprocussions, but honestly what else can you do? You have to do the right thing for your family, and tell everything else to go to hell. That’s pretty much what we did. When we did that, the stress of it went away. I’d suggest you do the same too. Write up a hardship letter, exactly the same as you did here, and then get a licensed short sale Realtor to sell your house. According to the “financial” hardship we are not drowning, but it looks like our bank gets that if they don’t let us short sale, they will be foreclosing on the house. Probably a good idea for you to do the same.

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avatar Virginia

Not just the banks. Wall Street, Rating Services (Moodys,etc) Politicians that cave to Corporate lobbists. Just a few that helped bring on this mortgage crisis. It’s all greed. Piss on the little guy. Well, I say, now its time to piss back. Just don’t stand in the wind.

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avatar vannie06@gmail.com

I am currently paying a little over $3K on my house that’s now at least $150K less than the purchase price ($370K) , and although both my wife and I have jobs , we are still struggling with the mortgage payments ‘coz we are also paying for babysitter ( $400 per month for 2 kids) , car payments, gasoline, etc … I AM GETTING READY TO DEFAULT THIS MONTH OF FEBRUARY…GOOD LUCK TO ME! ..I don’t need your sympathy but would really appreciate comments or suggestions . Thanks !

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avatar DP

Not sure where you live but you could rent a nice 3 bedroom for less than 3k a month and save the money. 150k is a lot of ground to make up. You could even save 9k by just defaulting 3 months although I hope the bank would work with you to find a affordable solution.

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avatar Debra

I am getting ready to default as well, we put 36000 down in 05 and another 50,000 in the home remodeling it….I hate to leave my home I have all my money in it, but the facts are its only worth 90,000 and I owe 150,000….we are almost 60 years old we will be dead before its paid off…..property’s will not get better fast enough to warrant us staying….we have been living on saving until they are almost gone, so leaving seems to make the most since, just wondering what advice I can get.

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avatar Lyle

WE did the same thing, I`m 62, Spent all my savings and still have a house that is worth only 70,000, (Not fancy here) We are just about ready to stop paying on it, Just is not worth staying here, would rather rent and have the same thing than have
maintaining this place.

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avatar Debra

I just missed my first payment I don’t know if I should call them yet or just wait for them to contact me…….I am a wreck!

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avatar Lyle

Relax!
I`m no lawyer, I can say you will have bad credit for 7 years or so, if you cannot make the payments it is maybe better you back away and if your young you will still have time in your life to get a home and go on and be happy. It is tough to letting your home go, if you cannot make the payments you do not have any other choice, well maybe you could starve and save it, then you would be in bad health or die, so you need to do what you have to to stay healthy. good luck.

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avatar Judy

I can make the payments and my interest rate is low but I am not paying on the principal because it is a rotten interest only mortgage recommended by my former realtor who is about to get a very nasty letter. from me siince she recommended this financial guy and was in cahoots in taking advantage of me. But still, I don’t really want to ruin my credit and I have to live somewhere. I would like to move to a warmer climate since I am older now and can’t stand the snow and cold here.

avatar DP

I keep hearing about contract and honor. The “contract” states that if I don’t pay the bank gets my property. How exactly am I going against the contract? The interest I have paid over the years has pretty much equated to the value of the property that I have lost. What exactly has hurt the bank? I’m the one without a home and with a credit score taking a hit. People should walk away if it’s best for them and their family.
Also if the bank does sell the property again on a loan they will continue to make money….just not as much.

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avatar Cp

DP, such a brilliant summation. I am having such a hard time with this, and your words helped me. Thank you.

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avatar Rayca

Bravo. Excellent analogy DP. My hands are clapping for you. I’m planning my retirement. I’m NOT staying in a worthless condo where the HOA is not keeping up appearances of the complex. It’s like a ghost town. It’s getting very rundown and riff-raff are taking over as tenants because owners have bailed. I worked too hard and long to live my “golden” years like that. I’m going to buy a little something in the country and try and rent this place out and see how it goes. I will, in good faith, try that but if I can’t afford both or my health starts to suffer because of the stress in maintaining 2 properties, I’m dumping the first. We didn’t create this mess and we shouldn’t be penalized. The banks caused us to be victims and now they’re going to try and turn it around and cry victim themselves?? I don’t think so.

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avatar Totally Confused

OK, I am totally confused. I am recently seperated and have 2 small kids. My husband moved out and the kids and I are still living in our house. We decided to try making the Home Affordable program (Obama) and after a LONG road, last Friday we were approved. I cannot afford to live in the house with our 2 kids (my husband had decided to keep thye house) so I am working with a realtor to help my sister and her husband purchase a home for me and the kids and we will pay her as we would a bank. My husband and I both had over 800 credit scores until we applied for the Making Home Affordable program. As the gentleman said above, we had to default on our mortgage just to qualify! OMG! Now my husband tells me he is not sure if he wants to keep the house, I can’t afford it, what do I do? Do I just continue with the MHA program and try to stay in the house myself or stop paying altogether and walk away. I am completly confused!

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avatar Troy

Yea just try to stay in your house with the MPA, also contact your local goverment hud houseing they have counslors that are free they do not cost you money, and they can help you with MHA and your bank and guide you along the way in this tough house job market. I say this because I am there and this is how i got help, talking to just the bank and MHA was like pulling teeth. I think it’s best to have a houseing counslor on your side, but remember they the helpers hud coulnslors are free pay no one nothing.

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avatar Liz Roy

Wow. I am shocked at how all this have been allowed to happen. The banks definitely have us by the neck. I finally could buy a condo after saving for many years (I am now 64 ) I was married and my husband decided to leave he couldn’t handle the stress of trying to catch up to the market that was shooting through the roof in the 80s , so we could never afford to buy our home then even with both of us working.
When I was 60 I got some money after my parents passed away and I had a full time job, the price of a condo had come down in price (in 2007) and I took that money and bought my condo not knowing then that the market would do the exact opposite from the 80s. I lost my job only two months later. I bought not for investments but for a place to live probably for the rest of my life and it makes me sick to see how people with “spare change” are buying all the ones that has been foreclosed on; they will be making a mint in a few years after renting them out all this time; that should not be allowed. One woman told me proudly “I just bought 10 condos here in this complex” She doesn’t even live here in any of them. I hope she feels good about steeling it from the poor persons who had to give it up. I might have to give mine up soon. My savings are dwindling and I will have nothing to live on at my old age. I have no children so am I going to end up on the street in this great country of ours? I was told at the clinic when I wanted a mammogram that they didn’t have the funds to help me get one, so we are getting sicker too on top of everything. I am not sick, but are trying to prevent getting sick by having a checkup now and then. Insurance you say? What insurance? Where am I going to find the money to pay the insurance companies which is another way to get very little for all the money you pay in premiums? Eat right, don’t smoke and stay healthy is the best insurance, but we should be able to get help with checkups.
I have been working part time although always looking for work, but being 64 and with so many out of work it is not likely that anyone will hire me even though I am healthy, look younger ( or so they say) and active in sports and have lots of experience and work cheap even though I am worth more. I may have to try to rent my condo ( I still have to pay part of it since my payments are higher than what I will get in rent money) and move in with my sister if she let me stay there for free. She lives in a place where they take care of their citizens. Perhaps we should all get together and build our own hotel where we can live happily ever after like they in the 1800s. The banks may be interested.???

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avatar Yana

I think it’s great if anyone can thrive off of the economy, such as by buying 10 condos at dirt cheap prices. After all, if they are doing so on credit, they will fall just as the rest, but if they have managed finances properly to the extent that they can pay cash, they deserve their success. As far as health care, I am for socialized medicine and think the USA system is a disgrace. Anyone who can live without proper care deserves whatever else good they can get.

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avatar Sallie

I truly agree, if they can afford it, do it. Don’t hate.

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avatar Sallie

Banks are committing modern day bank robbery on home owners! This is so wrong. The government bails them out only for them to steal from the people. Do not sign a contract loan from any bank. They will give your money away and hold you liable for the money. They force you to sign a contract loan to turn it into a reg loan by charging you a high 21% rate for disagreements. The contractor goes free; even if the home is incomplete. You will be stuck like chuck. This is what the bank has done to me and my family and the news in the great state of Kansas will not even look into it to let the public know what has happen to life after a military service to our great country. I have sent out several packages to the media all over the US and no one will air my story.

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avatar matt

Many people who go through shortsales are taking terrible advice, advice that will cause them such doom for many years to come. You will hear either real estate or mortgage brokers ask the most infamous question: Are you current or behind on your mortgage payments? Some will say yes and some will say no! Those who say no are then hit with this: In order for me to qualify you for a shortsale you have to go through 3 months without making a mortgage payment..Well this sometimes is one of the worst suggestions you as the homeowner can take. Never put your trust into the hands of any broker. My advice is to call an attorney who specializes in real estate shortsales and forceclosures. What many homeowners do not realize is that if you are having issues with negotiating a loan mod or a restructure with your current lender, the banks usually have a dept called the exectuve responce unit which is the higest dept right under the President of the lender. Many times the executive responce unit is willing to help you and there also times when they will approve a shortsale without you having to fall behind on payments. They many also protect you from getting your credit crushed as well as guarantee a 30 day closing which most shortsales can take months..Please do all that you can in terms of taking your time to gather all the right info to protect you from the damage you can take when selling your home short

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avatar Richard Cato

Matt, you assume there is a willing buyer who will pay your asking price. Banks may be willing to work a short sale for a small percentage below the mortgage value but not 30% or more. The people who are having problems are 50% or more underwater, not a few thousand. If I am a buyer and you are selling short, why should I accept your initial offer? You are desperate and the market is distressed. I can name my own price. Short sales may work in a few special cases, but it just is not an option for most people who are in trouble. Same for refinancing.The bank is not going to take a loss until they absolutely have to.

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avatar John baker

This whole thing sickens me. I know that some people run into hard times and can not afford the lifestyle they created financially anymore. To them I am truly sorry, and they must do what they have to.

To those of you out there that are planning on strategically foreclosing there homes, I too feel sorry for you. You are throwing away your financial future over a hypothetical loss of value? What happened to people taking responsibility of there commitments and not blame others for your decisions? You agreed to pay a set amount, and now that times are tough you want to just give up. I sure hope there are enough honest and responsible people out there to keep this housing market together until it turns around. I promise all of you that do keep to there commitments that some day you will be rewarded, and the ones who give up will be slaves to higher debt and higher interest rates in the future.

Let’s all make America a better place to live. We live in a self serving, in the now, instant gratification, and selfish world. Only you can change that.

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avatar Guy

This is a tough decision for anyone in any situation. Yes, we agreed to a price. A price that was dictated by a value certified by my lender who graciously and somewhat eagerly gave me my interest only loan. I’m not a specialist in the department of buying/selling homes so all I can go by to confirm the value of my potential home is to review comps. If these are inflated, what is my reliable source for investing my down payment, my credit and my livlihood? I’m seriously contemplating getting out of it one way or another because it is ridiculous to stand by and spend twice as much as I have to because the controls were not in place to protect my investment. Don’t forget, I’m losing everything I’ve put into the place, not just the interest and the exaggerated monthly mortgage I’ve been paying for the last 8 years. As mentioned in a previous comment, my commitment was for the house. If I don’t pay, they can have it. If that isn’t a winning situation for them, why did they do the deal in the first place? Greed.

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avatar Lyle

Here is one! Why should I keep paying on a home that is worth sixty percent of what we owe? I`m 62 and by the time we have it payed for I will be dead or close to it. We have tried to get cheaper interest, no deal thay say, (banks) we are current and have a credit score over 800 but as long as we have not fallen behind on paying they will not even try to help us out with lowering the interest. We have tried many different places for lower int. nothing doing they say, We have even ask if we could get a lower int. rate if we dropped it to fifteen years, they say no, Why should we be punished for being the people that are commited and have been paying out mortgage and still they don`t want to help us, for this reason I feel the bank can have the house, all they want is money money money, they can still make money if they would refinance people like us that have a higher interest rat and have great credit, but no thay want everyone to have bad credit.

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avatar Pyrowidow

That is exactly what happened to us!! Underwriters wouldn’t touch us because no homes had sold for what we owed in our area even though we had 800+ credit score. Mortgage co refused to work with us because we were current. We finally stopped making payments; suddenly, they couldn’t stop trying to help us.

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avatar Sandy4U

Thank you for responding. I have had a few people who responded and can’t seem to find the link to respond to them directly~ anyway, thanks for taking the time out to answer me. Since I posted this first request~ I have had my roof done and a few other repairs from the help of a friend. I had continued to pay my payments and then was blessed. I have other problems now, barking dogs and nosey neighbors but over all things are better. Thanks again to those wanting to help me and am wishing you all the best too.

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avatar Lyle

Why don`t the banks refinance the people that have made thier payments? Yes we owe more than the house is worth, I just do not understand why they won`t lower your interest rate and help you save some money, but no! they say because your current on payments and you are not having any problems. Well! Then why don`t they refinance you before the problems start? The banks don`t want to help a person that is trying to make it and does have good credit and has always made thier payments, I feel we are the one`s they want to fail too just s they can have it all, so why should we try to pay for our home when we owe twice as much as it is worth, Save our money now and let them have our house too, some day they will come back and wish they would not have been so greaty.

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avatar Joe

John,

The commitment was to pay or let the bank secure the property. Get over yourself. I am abiding by my signed contract.

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avatar Inez Arias

I’m also debating to walk away from the house. My husband is the only one working at the moment. We have a First Mortgage and a home Equity loan and the payments are between them including insurance and taxes $1395.00 a month. When we took the loans in 2006 and 2007 we was making good money… We was bringing home $1200.00 to $1500.00 a week we make some renovations to the house for wich we spend over $20,000.00 the value of my house was $17500.00 at the moment. But now the value of my house at this moment is $70,000.00, ((( We still owe $130,000.00 on it))) I’m not currently working because my son got sick, and I resign at the begining of the year to care for him, He pass way in May – 6 -11… but I have no luck founding a Job and my husband hours at work when from 60 – 70 a week a few years ago to 28 to 32 a week at the moment.

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avatar Stuck, but willing

We’re in a slightly different situation, but are faced with the same issue. We lost our business of 15 years, and it totally broke us. Like an American Trooper, I poured what I had into it to keep it going, until we had to close, then, continued to pay my bills (including the mortgage and credit) for another year – tapping the rest of our savings – because I was sure I would find something and wanted to maintain my credit rating. It took a year and a half to land something that pays less than half of what I made. I still kept up on the mortgage but not the taxes, I paid what I could afford and the bank worked with me the whole time. I’ve got 3 judgements against me and a garnishment in the works so I have no choice but to file BK. The question becomes, do I work with the bank on a refi that includes the mortgage balance and back taxes?, the sum total which is more than what it’s worth and unreasonably affordable?, or discharge that as well as everything else and start over. I have a family and I’m afraid with the BK, and discharging the house we won’t be able to find anything to rent reasonably or in a safe environment for my kids. If we refi, we’ll still have the house and neighborhood but a new 30 years to pay and high taxes (the monthly tax contribution is about 40% as much as the mortgage payment), and the total PMIT would be about 50% of my check. Any feedback?

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avatar LMM

When we bought our house 10 years ago we paid 175,000 and within 4 years we sunk in another 50,000 adding another 2 story garage, made our driveway circular, 2 decks, finished basement yada yada yada, paid off our 50,000 equity loan 3 years ago and have never been late on payments, problem is now, the house is worth about 150,000 which is approx what our balance is on the mortgage and even though we continue to pay on our mortgage, we are the ones that have been screwed!!! while others around us now by their homes for 100,000 although their homes on the outside don’t have what ours have, we can’t sell cause we would lose our ass! so much for buying, adding to the value and selling at a profit… it’s the banks fault!!! All those interest free loans, no doc loans etc..etc..etc…I believe is what made us homeowners lose our butts and made them richer cause of all the money they made at closing on those homes… I think the banks need to pay or GREATLY reduce our mortgage… Why should we be in the hole because of banks all over the nation allowing these loans to go through. it’s not fair to the homeowners who still continue to pay on their mortgages while watching others around them get their homes for next to nothing!!!! Any advice would be greatly appreciated on what to do. Thanks

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avatar Debra

We bought our home 6 years ago and paid 172,000 and put 36,000 down then we put an additional 45,000 with new roof, custom porch, concrete, custom kitchen and bath. we are 40% under water and have decided to walk OMG what a loss of money!… it is only worth about 85,000 and we owe 147,000 so we are walking and cutting the loss that will grieve us for years but why stay and throw away more money and continue to struggle in a beautiful home that we can no longer afford, we thought back when we put all that investment into we would down the road make money on it if we sold it….if the banks would modify to the currant market value then we could stay but that will not happen in a Fannie or Freddie back mortgage , thus I just made my last payment.

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avatar dp

If you could afford your home 5 years ago, why cant you afford it now? just because your home is worth less than you owe, you agreed to pay x amount over x number of years. in a few more years values will increase and you will no longer be under water. if the value didnt fall, would you be looking to walk away, or would you be making your payments? homes are long term investments. those who “lost” everything in the market did so because they panicked and sold on the way down or at the bottom. investments go up, investments go down. they are cycles. wait out the storm and you will be glad you did in the long term. and to an earlier post someone made about a person buying 10 condos. they were only buying what others were casting off.

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avatar Lee

Well for us 5 years ago our mortgage was about $300 dollars less. Because of the economy my husband is getting paid about $600 less than he used to. I even had to go get a job and it’s still not enough. Our electric bill and all other bills have increased. Even groceries have gone up. When our mortgage is due we can’t even buy food for our children. I just don’t see how to wait this out any longer. We have no saving gs left. We tried to refinance but got denied a few months ago. So what’s left for us?? Pay an extremely high mortgage while we all starve and can’t our furnace just broke and we have no extra money to fix that. We’ve been trying to get a loan modification for over 6 months they give us the run away. We keep making these payments but it’s only gotten harder and harder.

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avatar Lyle

Stuck in Mn.

My wife bought the house we live in over six years ago before we got married, it is an FMHA loan, we owe $120,000 and I have been told it is maybe worth $75,000 at best, I have retired and my wife will be working a few more years, we would like to move to a warmed climate. We cannot refinace they tell us, do to the fact we owe way more compared to what it is now worth. It is a manufactured home, I feel if we stay here we will have nothing when we get it paid for do to the fact these manufactured homes are getting very hard to refinance, I think that is going to elimanate them down the road. We are not late on payments. Are we here for life or is there away out? Can someone tell us what we should do? Thank you

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avatar Lmm

Lyle,
have you tried a loan modification? I know of people that have done this and got their mortgage amounts greatly reduced due to their homes values decreasing. It messes their credit up for about 2 years and they cannot sell for 2 years, but, this would be worth checking into.

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avatar Lyle

Yes! They told us we do not qualify for that. We were told the company will not take anything less than what we owe because we are not late on payments.

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avatar Lmm

Lyle,
I’ve heard that too from some friends that were approved for a loan modification, they needed to get behind on payments and then take a chance that the bank would approve them for the modification, to me that is too risky to do, cause if the bank doesn’t approve it, then you could end up facing foreclosure. We personally are not willing to take that risk as to having too much invested in our house over the last 10 years. It’s just so unfortunate, the government should reduce everyone’s payments/balance across the board to reflect the housing economy. After all, it was the banks fault that everything got out of control in the first place, and again, the ones that make payments on time are the ones that get it socked to em!

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avatar Richard Cato

Think about this,Lyle.In the not too distant future your circumstances may require you to consider selling your house. Your house may still be underwater and you may have to sell at or below your original purchase price, meaning you would take a loss on all the money you poured into the house because you felt “obligated ” to pay your mortgage. Your decision to stay in the house would be a good one if the cost to move and pay for alternate housing was much higher. But,and here is the good part, what if you could have found similar housing for much less and not have spent thousands on an underwater mortgage? Would it have still been a good decision?

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avatar Richard Cato

Sorry, I meant Lmm, not Lyle

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avatar Lyle

It would really help if we could at least get a lower interest rate, With a credit rating over 800 it is horrible not beable to get a lower interest loan, if we could get the going rate we could lower the interest rate over two points. We can`t becuase we owe to much, it makes us feel like they want everybody to fail

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avatar Richard Cato

Buying a house should be,should be, strictly a business consideration. The bank looks at it that way, why shouldn’t you?True enough that there is an emotional component, but that emotional component needs to take a back seat in tough times. Most people will pay their mortgages as long as they have the funds and they feel it is a worth while investment. When you are underwater with no hope of recovery and you can find shelter for a lot less, why continue paying for a losing asset? Your house is an ASSET;treat it that way. The bank most certainly is. They care not a whit about your emotional ties. They only care about your willingness and ability to pay. The bank has the means to handle your “non-performing asset”(that’s what your underwater house is called)so don’t worry about the bank.

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avatar Rosalind

Let me tell you, I left my house and the foundation was very bad the house is still in our name. The bank write off the house and the city is coming after us for property taxes. They have decided to garnish my wages. How do I get this house out if my name. It’s been 3 years. Help

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avatar Mitchell Ball

I walked away from my mortgage due to preditory lending. My house sold for 22,000 @ auction I owed 90,000 on the loan. They sent the 60 some thous.and dollar difference to the I.r.s as income now im supossed to pay income tax on that difference. Dont walk away you will not gey away with it. Has any one else found a way to get out of this trouble im in now ? Please help

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avatar LMH

Not sure when you wrote this or if the tax laws still allow this but if this was your primary residence you were allowed to exclude up to 250K income due to forgiveness of debt. If it was an investment home and you can prove insolvency (assets – debts < 0) on your taxes you are able to exclude the income. I had to do this numerous times as I lost 9 investiment homes when the market collapsed. The bank sends you a 1099 form. Give this to your tax preparer.

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avatar X Guy

So many stories here… reading each make me feel very sad for all, yet at the same time I have come to acceptance of ‘walking’ with the help of some of the above comments. — My story – We paid $629,000 June 2007 when our first son was born because we wanted him to have a home for at least the next 18 years of his life :-( . Our home is now worth $355,000 per the last comp which is identical in sq footage to my unit (townhome). So, $274,000.00 less in value AND we put at least $50,000.00 bring the place from 1974 era as it had not been touched since new. So, $274,000.00 + $50,000.00 = $324,000.00! We put down $125,000.00 or 20%- “WE I DID THE RIGHT THING!” We decided to have my wife stay home until our child was 2 and then began looking for work. Has looked for 3 + years now and nothing above $30,000.00 offered. With the cost of babysitter, she would work for free. We worked for 12 months with Wells Fargo to get a modification only after paying a lump $5,000.00 payment to them back in 2010 did they allow a rate reduction that took off $400.00 for 3 years. After the recent SHORT SALE in my lovely complex, we have decided to call it quits. We will rent a modest condo in a good school district here in the Bay Area and she can remain a stay-at-home mommy which is for the ‘betterment’ of our child. We should have left during the modification negotiations with Wells Fargo (in which we sent the required docs in on 4 seperate occasions!) long ago and would have saved a ton of $ per:

http://youwalkaway.com/output24/InterectiveFlashCalculator.html

Word of advice – If you are 20% under now and are struggling to feed your kids or save $ for your family, and have done all you can to get a favorable loan with your lender, WALK AWAY and do not feel guilty about it. You are holding onto what is called a bad investment and the bank who owns your home can afford the loss. You can’t. Lesson learned and now I’m hoping to help someone else not to make the same mistake we have made by waiting.

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avatar RJ

My father was recently diagnosed with vascular dementia in addition to suffering a stroke a few months ago. He no longer can live in his house independently. I had to move him into an assisted living facility to address his medical needs. His house has a mortgage balance that is about $25,000 higher than the values of similar homes in his neighborhood so trying to sell it and making up the difference isn’t possible because his only income is his pension and social security. He has no assets and very limited savings. I’ve got to help him out in this situation because he isn’t able to do this for himself. He can’t afford the costs of assisted living as well as continuing to make mortgage payments which include real estate taxes and homeowner’s insurance premiums. Is the best option to let the bank foreclose on his house?

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avatar Barnebyte

That is weird. In my country, there’s no such option as simply “walk away”. If you cannot pay your doubled mortgage, the bank will sell your house. They will sell it for the half of the actual price, and you will always owe them with the remaining amount. If you die, your child will complete the payment. Or your parents. Or your dog.
Sorry for my bad English, i’m not a native speaker.

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avatar NorseCode

Mine is another sad story. I am a single woman in my 60s and bought a little house 8 years ago after having rented it for 2 years. I’ve enjoyed it enormously. Up until November, upon my return from seeing kids/grandkids—–It had been raining while I was away and was very cold. On Monday evening, I decided to turn on the heat (gas furnace in crawl space). Well, it made a horrendous noise, so I immediately turned it off and looked up an HVAC repairman to come out the next day @ 2pm. That day, I went to unlock the crawl space prior to the tech coming out and found the whole place filled with water. No one could get in and my plastic storage bins were floating. So, I called the insurance company to come out the very next day. The adjuster said that it was surface water coming through the foundation vents and I said “no it is not and you can very clearly see that.” He was not happy with my response so he countered that he would send out an independent engineer for an assessment. I was away on business the next Wednesday when the engineer came to do his review. He called me and said that the foundation was crumbling (still no idea where the water is coming from because the city meter was not moving at all) and that I was in danger of the house collapsing with me in it. He stated that I must do something to correct the foundation problem as soon as possible. Well, like so many of you, I am upside down in the mortgage (50%). The foundation repair would cost 1/2 the mortgaged amount. Then on 2/1, I get a cancellation notice which will be effective 3/1. Okay, now I am in a home that may collapse at any moment plus I will not have any insurance in 3 weeks time. I conferred with family and they said “get out of that death trap and don’t put any more money into it.” This has literally made me sick. I am current on the mortgage and all my bills, so walking away is going to destroy my credit and is hurting my hyper-responsible nature. That being said, I went out and rented a little house this week and will not be staying in the dangerous house I own any more. Come March, no more payments will be made and the mortgage company will no doubt ruin me. Sad, but the danger became the issue, not making the payments on an upside-down mortgage. My life and my health were what motivated my action. How bad will it be when I am foreclosed? It is killing me and I loved my home. That is my sad story.

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avatar Gill_I_AM

I bought my 92 year old house 6 years ago for $130,000. I was able to make the payment and pay the monthly bills comfortably. I planned on going in and fixing it up and being out in 5 years. I was young and naive. After tearing into the basement, I found that my foundation walls and support system were failing. My 40 year old furnace and 10 year old air conditioner were not energy efficent. Basically, I got hosed. 5 years later, I lost my job, had a baby and my boyfriend decided to travel for work just to make our $1100 a month payment. We have to put $30,000 into the basement just to make it safe for us. So now that my house is only worth $80,000, we can’t afford to put the work into it that it so despreatly needs. My boyfriend wants to walk away from it but I am too proud. It is ruining our relationship but I am so afraid of ruining my credit for life. Any suggestions??

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avatar Debra

Sounds like you need to walk, there will be other homes down the road when the time is right, your credit will get better in a few years, remember there is no shame in doing whats important and makes the most sense, Good luck.

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avatar scott

im 41 single was making 40 000 a year ive lost my job in construction. i bought a cheap townhouse when things were good economy for 43000 put new roof, new heat ,new ac, new bathroom, new floors, new windows, after 10 years of never missing a payment at 6.5 percent nothing down fha loan i owe like 30000. the townhouses like mine in worse condition are just about all vacant in process of foreclosure. crime is moving in the area, people dont even want them for 10000 my moms health is going down fast i want to move in with her and take some minimum wage job or maybe 11 an hour and take care of her shes 63. she is disabled and in the modification program also. im thinking i dont want my mom miserable to die alone. it seems obvious to me take what furniture i have or want and move in her basement. lock the door and call b.o.a and tell them come get it!
i havent eaten but 1 meal a day for three weeks and have begun thinking about suicide. we both are underwater. together i could eat food though. please god someone help me, she cant take care of herself and i cant either

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avatar Debra

Please do what you have to do to live, it sounds like you need to walk, hell I say run! and take care of yourself and your mother we only have one mom and there will be other houses down the road nothing is worth all that pain, sometimes we all have to stop and look at the real situation and make the right choice at the right time. I am walking also after I have invested over 90,000 in my property who ever gets this home when I leave will reap all the work money and time that was done in vain as I too will be starting over and I am almost 60 years old….Good luck to you and God Bless. Remember there is no shame in doing the intelligent thing taking care of yourself and family is as good as it gets…also you can ask the bank for a deed in lue they will pay you for the deed and it is usually around 2500 that they give you and get a document stating that your loan was satisfied so they can’t come back later….good luck..

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avatar Nick

My brother and his girlfriend are living together in a house she bought before they met. 4 years later they have two children, he (because of a degenerative eye disease) is not working and she is the sole income provider for the household. They recently found that their home is worth 20,000 less than what they owe on it PLUS they need to fix the bathroom (i.e. totally replace), replace foundation in the basement, get new windows etc. They have an option to move into my other brother’s house and pay rent for a few years until she inherits her mother’s house (she has been asked to take out a $40,000 loan to give each of her siblings $10,000 since she is inheriting the house) my brother could take out this loan (his name is not on the house loan.) After talking with this over with their lender they were told they cannot voluntarily forclose. They spoke with their realator who told them to put the house on the market and instead of making the necessary repairs paint the mold spots on the celing that have accumulated from the prolematic bathroom, staple rugs over areas of the carpeting that have shown ware and a few other recomendations that had me appalled. Is this common in the realestate business? Not to fix problems but just mask them? Is there some kind of “lemon law” for homes? Any advice would be appreciated! Thank you!

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avatar so happy now

I walked away in June of 2011 and am so relieved.i am still currently living in that home,and have recieved very few calls from my lender.My home is now worth 80-100k less than I owed on it,and after a horrible re-fi(my own fault),I went from a 1600$ payment to 2700$..lots of reasons why,but it could of been avoided.My credit will be shot,but I have saved 16,000$ in cash already.My spouse(who wasnt on my first house)will be buying our next home w/o me on it,and only needs 5% down because we have got her credit into the high 600′s.Im in Washington,and would like to thank all the democrats for catering to the lazy,financially unresponsible home owners.Thanks Obama! You democrats finally paid off!

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avatar Thnkr917

“horrible re-fi(my own fault)”……”lots of reasons why,but it could of been avoided” sounds like you are also one of those “lazy,financially unresponsible home owners”. Ever heard the expression “pot calling the kettle black”?
I’m sick of hearing all the slandering of “irresponsible homeowners”. Maybe some or a lot made bad choices (I’ll include myself), but no one thought the economy was just going to bottom out that far and that fast. Regular people didn’t expected that housing prices were going to drop and jobs were going to dry up overnight. There are the things that happen in life, like illness and death, but people couldn’t rebound from those life events because all of their resources were tied up in their houses and the rest of our economic mess that came crashing down on us all. Stop the blaming each other and show some compassion. Right now the main difference between the ones who still have their houses and the ones who don’t (whether they walked away or were forced to leave or sell) is simply in what kinds of resources they had to fall back on. I walked away and filed a bankruptcy to cover what I owed. I have crappy credit, but my stress is almost gone. As for finding a new place to live, don’t you think that renters know that more than half of the people wanting to rent right now have been through the same thing? So you pay two months rent for deposit instead of one, it still doesn’t add up to $70,000 upside down mortgage with 3 times a normal monthly payment.
I have NO loyalty to that mortgage contract you people are whining about. You would be the same people that would take your luggage onto the lifeboats when the Titanic sinks (no sense of what is really important or what is really happening for that matter).

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avatar Debra

I agree all the way !!! sometimes some of us fall on bad luck, loss of income and bad choices, so why would anyone in their right mind stay in a struggling upside down mortgage unless you have more money than sense, the bankers have shown little to no remorse with realistic modifications all they had to do in most cases was modify to currant market value to all the true hardship (real) cases and this mess would not have grown to economic disaster which now has lead to massive foreclosures and upside down housing causing so many to start at the bottom all over again….bail out!!! hmmmm…all the greedy deals that were made from 2000 and up were so far fetched selling for crazy prices no wonder people are screwed. as far as Honor and responsibility do what you have to do to make it!…show respect to your family making a sound intelligent decision and learn a valuable lesson in life” there is no shame here.

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avatar Pam

Well, we are one payment behind on our mortgage and we received from the bank a Notice of Pre-foreclosure options…. So, we are to meet with a Housing counselor provided by hud I believe…. We are probably $75,000 upside down on our house. Do we have to accept any of the proposals at this meeting? We have already been denied a loan modification, so it is not like we have not tried to work with our bank, Flagstar.
We feel like we just want to walk away, can we do that if we attend this meeting to “”so call work out other options?” We thought we would just still remain in the house and save our payments of $l.063.00 per month and try to buy a mobile home in florida…. Any thoughts or has anyone done the counseling with a housing counselor?

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avatar Debra

I don’t think the counseling session will change anything, they will most likely just go over your options and agree with you that a foreclosure will be looming. unless these bankers adjust the loan to currant value in- which is unlikely” I think the only thing to do is walk!, you don’t have to take any of the options if you do not feel they will make a permanent cure-all we had a mod a year ago only to realize we are still in a horrible bind thus we have missed our fist payment I’m sure we will hear something in the next couple weeks….good luck.

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avatar tw

1st off i woild like to say that i have been in my home for 8 years. Up until last year i have not had any problems until now. My 1st problem is that my house is worth 30,000 but i owe 112,000 on the loan. i can affford to pay the morgage but the neighborhood has taken a beaten and people keep breaking into my house!(2nd problem) this is my 3rd break in! They even went as far as cutting a hole into my floor! I dont know what to do i have and alerm system but they seems to get around it everytime. they even stole my a.c system. THIS IS REALLY BAD. my family is scared to live here considering how offten they keep comming back. I replace it they find a way to take it. Im ready to walk! LEAVE IT ALL BEHIND ME! Im wondering if anybody else incountered this problem and can give me and insight on what is best…p.s my neighbors seems to hate me for some reason i have never done anything to them!

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avatar Lynn W

Should you do bankruptcy or just walk away? Will I be hit with a tax form at the end of the year if we just walk away? We can’t afford our home and never will be able to. Plus we owe 154,000.00 and we could only get maybe 70,000.00 if that. So bankruptcy or walk away our credit is in BAD shape which one will make it even worse?

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avatar Tom G

WoW ..I cant believe all this. and now its me. Im a Pharmacist who has until Sept 08 made all the right moves. I paid my house off then refinanced to send my 4 daughters to school and get some things I choose for them to have like horses….This was good for them but a bad move for thier mother and I. We built our home in 1989 and spent 149000.00 on the construction loan..We owned the property. We have a home 2500 feet off the road with the horse barn, creeks, and pasture on the Chattahoochee River right below Lake lanier. Its a wonderful place to live. Long story made short …We inherited a house next door which we were renting out. It belonged to my mother and was what was left of a family farm. It was a very nice home, however, my mother had been terribly ill and had left alot of debt. Like I said we were renting the house out after putting a terrific amount of money into it to bring it up to date. Then our problems started. The house was broken into and all the copper wires and pipe was stolen out of the basement,as well as, other damage to the rest of house. The damage came to about 14000.00 according to appraisers. Well we had let the bank put insurance on the house because it was so muc cheaper than what we had through Travlers..we were still having the insurance escrowed and were paying for it. We filed an insurance claim and the Bank wrote us a letter saying there was only 500.00 of damage and they were closing the claim when in actuallity it was 14,000.00 and the Balboa company should repair it. To shorten this after 9 months the Bank (BOA) forclosed, both the bank and Insurance company had got weekly letters from me telling them the damage was more extensive and they need to fix it so we could rent it out and make payments. In some way at this time the insurance company was an affiliate of BOA, the bank. They had never even sent out an appraiser, I know because the house was located a thousand feet down a gated drive for which no one had ever asked me for access, and thier was no way to get in with out codes and keys. Well, there was alot of lies told me by the bank while I put up the tenants in a hotel for the house to be repaired. After all the renovations I had done, and paying off all my moms debt I didnt have the money, In addition, I had put the house up for sell before all this happened and a realator had an original offer and a short sell offer after all this damage. BOA ignored the Realators and never got back in touch. After 9 months the bank forclosed. They then went back and used my estimates to file an insurance claim on the house for which they were paid. This was afer foreclosing. Now at the sam time all this was going on we had been on a foreberance on our home. I had called to get off the foreberance (after aquiring a Pharmacist job at Krogers). I was given the amounts to catch up and I paid them thru a Publix Western Union Quick Pay. The next day the money showed on my accounts correctly, several weeks laeter they didnt show up anywhewre. I called BOA and aske thm what had happened to my payments and they told me they didnt know and they would need to research it. I spent he net months calling and finally they told me it had been in advertantly put in my bank account. Well I though to myself this will be easy Ill just go online and pay the money back. However, when I went to my bank account the money was not there. Then I gotr to thinking….I dont Bank with BOA and how would they know where my bank account was? I had paid these quick pays at publix with cash. Well we started on what amounted to a 24 month chase that has ended with me having to put 24000 dollars on the back of my loan and struggling to make payment….While we have a heloc that we were told that would be modified ater the 1st but hasnt been and it looks like were gonna end up having to put 7000 or so onto that loan and modify. Well, while all this is going on a Krogers locates 800 feet from the property along with several fast food chains, and chase bank. Then the County is going to condemn us for a road widening . Krogers agress to do the road widening up to about 500 feet from us. Now the county actting on behslf of the state and thru Morelad Antobeli associates comes out to purchase our land, put us upside down on our home. The draw lines taking our pasturse and with not set back off our barn, but around our barn and they want to leave us a house with a drive. Take our pastures and creek and not buy the barn they have made useless. This will make our private little horse far go from a value of approximatelt 1,000,000.00.00 to just a 30 year old home at 159,000.00. It wasnt long after Krogers started building that they started washing out my creeks and making the hores sick, which we had to move. When I got stop orders through the state against Krogers they fired me and said I had fraudulenlty filled out thier application. Which unemployment found to be alotta of Bull shit and awarded me un employment. I had never had an appraisal below 85. Well while were researching this we find out that a guy named Wienan had purchased the property for krogers. That he had secured a loan through an attorney group and it was recorded while he was in the hospital 2 weeks later. The loan cam out of Tarp money which supposedly if you listen to the news, they werent loaning this kind of money anymore out of TARP. John Wienen died 2 weeks later in the hospital. The attornet group behind all of this was womblye, carlisle, snyder ect…look up thats enough info. They done represent you or me, only the 1% and to get what they want. However they have 3 basic groups…..Land aquisition, Investments, and I think litigation. I wonder if this one giant firm is consulting and and driving this whole thing against us. This is too much to be coincidence…and I have left out alot of the hardships….but just so you know were gonna continue to fight like Hell……and Womble…..Chamberlain Hrdicka say you wont win…Not here in the South…..

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avatar Carol

I have a question; when a homeowner looses their home and they abandon their property – such as furniture, what legally needs to happen? Can it be sold and apply the money to the debt?

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avatar Chris

Why would it be hard to get a job if your credit isn’t good? You need a job to pay for things.

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avatar Jill

I have not read all the comments though I will, but I need to say, who is the really immoral here? If you ask me, the banks should be cleaning up the mess that has been made granted we signed the docs but under the impression that it was a good decision. The banks should be forced into reassessing the value of homes and modifying the loans! Everyone should be responsable not just the “people who can afford to pay” the exorbanent price of their worthless properties!!….just an opinion

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avatar Jenny Lee

Can someone offer good advice for my house problem? It would help me out so much… My husband and I bought a house in 1998. It is actually a duplex home. With one bedroom/bath upstairs and one bedroom /bath downstairs. We had three children quickly after moving in. We began having bad foundation trouble about two years after moving in. The Problem only got worse. Finally, seven years ago we had to take out an equity loan thru the bank… To fix the foundation. It cost us $10,000. No foundation company would give us a warranty past two years. We had to have the foundation repaired two more times within the two years. Now, the foundation problem is much worse. And our roof has been leaking for a year now…. In five different spots. I am now concerned for my children’s safety. With the roof damage…. We can not rent the house. That is how bad off it is. We can not get another loan to fix it. It would take thousands to repair. And this house is just a money pit. Our credit is fair. Not great though. Since my husband has had several surgeries in the past five years. Our bills did get behind some. I desperately need to get my kids in a safe home. Any advice would help. Thank you very much.

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avatar Carol

Jenny:

I would check your old documents when you purchased the home and see it is was disclosed that there was a foundation issue. If it was and it states it’s fixed I would consult the person you purchased the home from. However, I do think you are in a tough situation, the bank isn’t responsible and possibly even the person you purchased the home from is no longer, if at all, responsible. Additionally, I know for the most part people do not want to just walk away from their homes, but you may have to cut your losses and secure a place that will not stress you out, safe for your kids and allow you to move forward before you credit is in the tank.

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avatar Kim

OMG!!
Here is my question, I bought my home in 2006 when the market was high. I saved for years and put over 150,000 down. Bought my home for 658,000 and now it is worth 447,000. I have made every payment and have not refinanced as of yet. I can afford the payments but I am 60 years old and want to be able to eat and have roof over my head when I retire. Not to mention some type of health insurance. My credit is excellent. I am so confused as what to do, just walk away and let the bank have this place or do a short sale? Really do not care about my credit at this point, but then again I do care.
I just re-married 4 years ago and my husbands name is not on the deed. Was thinking should I just stop making payments and save that money and purchase another place in his name as his credit should not be affected?
Good grief the American dream…….My head hurts……

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avatar gerald

F.Y.I. If you are approved for making homes affordable or any of Obummers refi programs the one thing they dont tell you is its temporary. They refi you at say 2% or whatever low interest rate at first but it eventually goes back up to whatever 8% and you are back in the same stressfull mess been there done it all of the above.Like the one person said your contract is to pay or give the property back.The government programs are scams.Do all you can honestly do.I went the short sale route fanny mae declined a offer at 175.000 I owed 190.000.fanny mae bought back the house at 211.000 at the court house steps.I was never late a payment untill I was told to get three months behind.they then proceeded to forclose.The only thing I can see is they are buying up these homes like vultures in hopes of a real estate rebound and then resale these homes at a profit and right off the previous mortgage as a loss tax right off win win for them.freddy and fanny has rental manegment all across the country renting these homes out till they are sold.this is the government not the banks mind you.good luck to all of you having this prob lots of stress I know!

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avatar Sandy4U

I have been on disability for over thirty years and aprox. 17 years ago I bought a house with the help of my mom’s down payment and her signing on my loan. My mortgage came out of my bank from my S.S. payment and haven’t been late on that but do have other horrible credit. However now I need a new roof, my mom is in a nursing home and can’t help me. The rain is pouring in and have mold problems and might even have sewer problems too. I still love my house ~but am getting sicker staying here and yet too sick to move and on a limited budget. I Idon’t qualify for anything President Obama might give out~ because my mom’s name is still on my loan, even though she has never paid only the down payment. Every time it rains I get sicker and really have no one I can turn too. I am 58 years old and lives alone. I have so many medical problems as it is.. Should I walk away from my house and mortage?

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avatar anonymous

I was just wondering if there is anything we can do! We bought our home in January 2010 and we just recently figured out we are on a floating foundation. According to our loan papers No one is supposed to get the type of home loan we did on a floating foundation. Is there any loop holes or anything we can do ? We did nothing wrong it was the bank who approved our loan who was in the wrong and we should have never been allowed this mortgage

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avatar Asandy4u

I suggest talking to an attorney

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avatar salvatore

Bought my home in 1992 for $155,000.00. Today in this market and in Monroe County, PA, I would be lucky to get $140000. My mortgage and home equity loan (chose interest only payment in 2005) is 137000. I am 80 years old and upkeep is more than I can handle. Been advised to “walk away”, as the foreclosure would not take place for 1 year or more; therefore, you would have more money at end of year than if you tried to sell. Any suggestions.

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avatar Asandy4u

Salvatore, I don’t know enough about this type of stuff that I should make a comment ~but my mom was so happy to get out of her home at that age, and find a place like “assisted living.” That way your sort of planning ahead, and yet can still have your own privacy etc. I would suggest talking to your family etc. I forget what it’s called > maybe reverse mortgage, where you can live off the equity If you have family helping you perhaps you could rent out your place and then family can decide what to do later on when things get better. I hate to see your faithful payments of all these years go down the drain. It will be just your luck that someone tries to get you to forclose early without any money saved up. Put in a shorter question about this in your browser and really read up on other ideas what to do. Maybe ask someone at the bank. People do that all the time, stay free in the house to save up but then your credit will go to heck and you will be bugged with a million phone calls to pay bills > that can be old. Also they call family as well. My mom didn’t walk away from her mortage but she walked away from her “bills” and they called me tons of times in a single day > she has since died and they still calling. Kind of not fair to the ones getting the calls. Usually you can get free thirty minutes when you call an attorney… maybe you could call one or two or three. Find the right attorney to call and then call a few and get some advice that way. My heart is heavy for you as if you are trying to decide this alone, many people take advantage of older people and would hope that no one does that to you. Don’t make any haste decisions> PRAY and study up on it… it will be worth it in the end. I do think moving to a smaller place will make you feel better. ~ but that bad credit will follow you and you might not be able to get that perfect small place. Anyway, I will pray for you… and hope you find some good advice. Peace out!

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avatar Angela woody

good evening all.. so I’m wondering if any of you have advice my husband and I live in a mobil home and still owe $50,000 on it and really at this point don’t know what to do because its up for sale and there is no way we are going to get what we owe on it.. so i called a Bankruptcy lawyer to see if we could file chapter 7 on it and we make to much to to that so we would have to file a chapter 13. My ?? is Im wondering how much we will have to pay back if we do file??

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