Should I walk away from my "underwater" home?

by The Berean 113 Replies latest jw friends

• 

  JeffT

  Speaking as an accountant.

  I want back an reread the OP. First question: can you afford the payment? If yes, the value of the house is irrelevant, you have an obligation to pay the money back. Failure to do so is going to ruin your credit for a very long time. It is one thing to get into trouble in a down economy, it is something else to decide you don't feel like doing what you said you were going to do. FYI, your car loses a bunch of value the second you drive it off the lot. This does not relieve of the need to pay the money back.

  If the answer to my question is no, Robdar is absolutely right. You need responsible legal counsel to steer through the problem. A bankruptcy court can force a creditor to reschedule a debt. They're called "cram loans" as in "the judge crammed this crummy loan down our throats." Banks hate them, but I suspect the courts don't care much about the banks just now. Or the court may make you sell the house, but it may be able to protect some of your equity.

  My .02 on the subject.
• 

  acolytes

  Hi Jeff.( Forgive me if my simplification missed an importantant point you made .)

  You said" Can you afford the payment." If the answer is NO you need legal councel- (What can legal councel do?)

  My answer is why. How do you benifit from it?)

  My advice.

  A. See the bank have the terms of the contract changed.

  B. Find a tennent to help with the repayment.

  Jeff maybe the system in England to America is different with property. Interestingly I believe 80% of wealth in America is inherited through property. If my statistic is true good advice must be "hang on in their"

  Acolytes
• 

  The Berean

  acolytes;

  I am still listening to comments... please remember I am a former JW who had an agreement with an organizarion and walked away because frankly, it wasn't worth it. Soo ... I'm a little confused about "paying what you vow." It seems to me that whatever long-term damage is less should be the guideline. Do any agree?

  Thax
• 

  Robdar

  Acolytes:

  A. See the bank have the terms of the contract changed.

  Do you know how difficult that is to do in the US? My office has been involved with Wells Fargo, which seems to be the only lending institution actually attempting to work with it's customers in modifying their loans, and it is like trying to swim in molasses.

  Many banks refuse to assist the customer and, in essence, nudge their client towards foreclosure and/or bankruptcy.

  It is better to have the courts step in and get it done efficiently and correctly.
• 

  JeffT

  Robdar answered before I got here, but there are two things a lawyer can do. One is file bankruptcy. This doesn't necessarily wipe you out, chapter 13, also called a wage earner plan, can rework your debt to make it possible to repay everything. If your mortgage company dealt with you fraudently or tacked a bunch of marginal fees you may be able to sue them. I don't know about England, but in the US you want a lawyer that works for you guiding you through the minefield.

  There is a difference between waking away from a lying religion and welching on a debt that the other party entered into honestly. Note; this doesn't apply if they weren't honest - which is why you may need a lawyer.

  If your situation is that you can't make the payment, a lawyer can help minimize the damage. Somewhere down the road you may need to explain a foreclosure. If the reason is "the economy went south and I had to file bankruptcy" a banker may say "yeah that happened to a lot of people a few years ago." If you say "the value of my house went down so I said to hell with it" you are going to have a VERY hard time finding somebody that wants to loan you money for anything.
• 

  treadnh2o

  This may not go over well....

  You need to make the best business decision for yourself. It may or not include walking away from your home. Don't make any decision personal.
• 

  watson

  If I sign on the "dotted line," then I am obligated to abide by the contract. If what I buy loses value, it does not mean that now, I am not obligated. If everyone acted this way, we would basically have complete anarchy. Just because greedy bankers screwed many, that does not mean it's right to follow their lead.

  If you cannot honor your obligation, and you risk losing everything, and a roof over your head, then yes, you should take advantage of the safety net put in place by the bankruptcy laws.

  Too many have abused this safety net (financial strategy...right, "charge!"), and now the bankruptcy laws are much tougher because of it. Now, when more people are honestly in need of it.

  Come on people.
• 

  beksbks

  Bankruptcy is biblical! Jubilee!

  As Watson said, you bought it to live in right? It's this very business of expecting to make a bundle on real estate, and not being willing to just accumulate and wait it out that is screwing the country right now. Sorry Berean this is not really about you, because I don't know your reasons.

  You know what else really pisses me off? Those commercials for getting out of paying all your back taxes. If people just paid them when they owed them instead of letting them stack up, they wouldn't be in such trouble. I pay my damn taxes, why shouldn't they?

  Sorry B. Rob is right, you need professional advice.
• 

  acolytes

  Hi Robcar If your comment about not being able to get an appointment with a bank is true, I think that is smameful-

  In England and Sweden their would be no problem to see the bankmanager who would lot at your complete financial situation and try to come to a positive situation.

  The Berean Iam not qualified to advise on the American system. Only to say consider the consequences of walking away carefully. Ie who benifits you or the bank if you walk away? I think the bank benifits. Secondly take the long term view how much do you think the home will be worth in 10 years.

  All The Best

  Acolytes
• 

  DJK

  If you did walk away, where would you go?

  Local to me, the rental fee for a two bedroom apartment is equal to my mortgage payment. Apartment rates continue to rise.

  Currently the housing market is poor. There are two homes on my street that have been for sale for two years and vacant. The market will come back someday, maybe better than it was.