Comments on: When is it ok to walk away?

By: jks, WI

jks, WI — Wed, 18 Nov 2009 18:23:31 +0000

Help….we have a house that was valued at $400K when we purchased it 4 years ago new. Our 1st mtg is valued at $268K, and now the assessed valued has dropped to $299. Which leaves us with a little equity, however our 2nd mtg is still at $140K due to some medical bills. I recently lost my position as a VP of Sales due to the economy. We really don’t want to lose our home for our son’s sake, but can’t afford both payments for very long. Is there any options for us?

By: kjhomefinder, Denver Colorado

kjhomefinder, Denver Colorado — Sun, 15 Nov 2009 22:11:41 +0000

Only when there is nothing else you can do. Talk to a short sale specialist in your hometown. Avoid national companies who process short sales in several states. for Colorado visit http://www.kjhomefinder.com

By: Wolf Consultants, Lombard, IL

Wolf Consultants, Lombard, IL — Mon, 03 Aug 2009 02:19:28 +0000

This is a tough decision for anyone. Beyond the credit implications, who wants to be the “bad neighbor” whose abandoned home brings down the community. We aren’t advocating walking away, but we do believe that if you walk away there is a way to do it and remain a responsible neighbor. Our service is free, currently focused on Illiinois and the Midwest. Visit us at http://www.walkawayclean.com or add your views to our forum at http://walkawayclean.wolfconsultants.com. Let us know what you think about what we’re offering.

By: Hartford CT

Hartford CT — Tue, 07 Jul 2009 02:51:08 +0000

This is utter nonsense! what does a business do when taking a loss? They take a write-off to lower their liability. So here we are with an upside down loan to value ratio created by the real estate downturn. You house is now worth less than your loan and everyone wants to walk away from the sink hole. I say let’s do it the business way and write off the loss. Why can’t we deduct the entire loss of our investment (our home)for tax savings and advantages? The appraiser says your home is now worth $60,000 less than it was a year ago, ok, let’s take a $60,000 loss and use the loss to offset our taxable obligations. In fact, perhaps we can use the loss to help offset other financial burdens. Student loans, medical bills, insurance costs can in some form be reduced or possibly forgiven. And what about the reverse side of this coin? We`already pay for a positive investment, but why can’t we also use our loss to help offset costs.

By: Sarah Becker, Yuba City, CA

Sarah Becker, Yuba City, CA — Tue, 02 Jun 2009 22:30:03 +0000

The reasons to avoid a foreclosure are profound! A foreclosure could remain on a credit history for 10+ years and lower a credit score by as much as 300 points for as long as 3 years. In a foreclosure, the bank may bill a previous owner for the difference in eventual selling price and the home loan. A successful short sale, on the other hand, may not be reported on a credit history and could impact a credit score by as little as 50 points for only 12-18 months. And in a short sale, a lender could be convinced to give up the right to pursue a settlement altogether. If you think a foreclosure is inevitable, your best bet is to contact an experienced, knowledgable realtor in your area who may be able to help you get out from under your house without going through the trauma of a foreclosure. In Northern California, the Becker and Steidlmayer Re/Max Team at http://www.topspaces.com is offering free initial consultations. Professional realtors like Becker & Steidlmayer agents are dedicated to helping distressed homeowners during these difficult times. It is in the best interest of homeowners and their surrounding communities to avoid foreclosure!

By: DJM CA

DJM CA — Tue, 26 May 2009 19:06:39 +0000

I bought a new home in 2006 In CA. I put 100K liquid cash up for the deal and got a 1st 6% interest only and a 2nd w/ 7% 15 yr interest only credit line. On a $490,000 Home 410/80 thousand split. Today I owe $490,000 for a home worth $240,000. with a payment of 3500/month for 30 years with nothing more than an option to own if I make enough equity back before the end of the loan for a tune of 1.4 million. Paying High dollar rent for a snow ball’s chance in hell to do nothing more then to refinance. 1099 or not what choice do we have but to walk away. High priced rent for ever just never own. Some of you losing money that wasn’t even really there don’t care, for your own investments sake, but how about my generation that just got in to the home owners club and was only offered only B.S. loans to overcome inflation, that just lose everything. Fool me once same on you. Fool me twice shame on me. My demographic is the 40-50 years of the home the lending markets future. Good luck sooner or later there isn’t enough money in the world to stop their money lust from becoming large scale commercial property ownership and the tax payer gets to loan them the money for 6% down 30 year fully amortized with golden parachutes and 10% equity guaranties. Could afford your home for that? Then lenders sold a bunch of nothing and now everyone is giving it back. I guess that’s the way it goes. Let a couple of these lenders go under and the home owners keep their properties and see how long it takes for the lenders to start playing far again. How do I refinance with the feds directly and can I 1099 the old lender for the difference? Bottom line the lenders can keep selling nothing and foreclosing on them to re sell as long as they keep the income tax liability’s rolling. This is the American dream the future left for your kids.

By: Struggling, Naples, FL

Struggling, Naples, FL — Wed, 13 May 2009 00:16:47 +0000

Morals versus unforseen economic cicumstances.

We are a family that is responsible, pay our bills on time and have credit scores of 760 plus. Our home is now worth $70,000 less than our mortgage; we live in Florida which has seen some of the most drastic property value decreases in the country. In the past 30 days it has declined $5,000.

We now must consider walking away from our home. Association fees continue to escalate, assesment notices keep coming as a result of others not being able to afford to pay. We have a responsibility to the lien holder but we have a greater responsibility to our children. Who could have foreseen this coming?

My wife and I struggle with what we should do everyday. There are so many mixed messages out there. In the end you will do what you have to do. And why now does it seem ok to walk away? Ask the government; they keep bailing out the banks rather than helping the people.

By: audrey, LA, CA

audrey, LA, CA — Thu, 30 Apr 2009 13:26:50 +0000

Anyone who thinks short sale is the best alternative should read this article. (You might think differently.)

http://online.wsj.com/article/SB124104990739271023.html

People keep saying short sale is the better alternative but in fact it still ruins your credit scores, the banks still come after you for the difference, you may (or may not) have to continue to make payments and you drag on the pain until they can agree to the sale. By the time they can agree to the short sale, you probably end up having to foreclose anyways.

I’m not sure the added stress is a good option for everyone but it depends on your situation. Banks need to do more to help without hidden strings attached especially if you see how much money in interest they take at the beginning of the loan.

By: Mahesh Bansal, Audubon, PA

Mahesh Bansal, Audubon, PA — Wed, 11 Mar 2009 15:39:28 +0000

Hi Monroe Carey,

In my humble opinion, you have to consider what is the equity you have in your home.What is the amount you owe to bank ?
Also think of other out of box solutions eg. Are there any ear protecting device with which your husband can continue on current job without any adverse impact ?

By: carey, monroe MI

carey, monroe MI — Wed, 18 Feb 2009 01:26:37 +0000

My husband and I are in our thirties and we bought our house 7 years ago. We are making good money we both have jobs. So we feel like we have more than some people. Over time we have noticed my husbands hearing getting worse. Last year he went to an audiologist and they said he was 70% deaf. They told him if he continued to work in his currant job then by the time he is 40 he would probubly be completly deaf. We have excellent credit. Never paid our house payment late. We have a job offer in Florida a 1000 miles away. Do we walk away from our house. We bought it for 124,000 and over the years we have done tons of upgrades, last year it was appraised at 166,000. The realtor came today and said it would only list for 99,000. WHAT!! Do you walk away? He has looked and looked for a different job here in Michigan, they are not out there. Since we are not behind we can’t get Wells Fargo to do a short sale. Do you walk away? We need advice!!

By: Mahesh Bansal, Audubon, PA

Mahesh Bansal, Audubon, PA — Thu, 12 Feb 2009 12:37:05 +0000

Current situation is very dicey.Both the decisions ( abandon or throw good money) have their own pros and cons. The end decision should depend upon one’s uniques situation. One has to weigh in taking hit on credit history and facing consequent circumstances versus really struggling to make payments. In my view one has to evalute what is best for one in current circumstances for him or her rather than regretting over past mistake.
I duly agree easiest thing is to give advice. Reality is known to who faces it.

By: arthur talbott Hoschton, Georgia

arthur talbott Hoschton, Georgia — Sat, 27 Dec 2008 14:37:11 +0000

the guy with two (2) no money down, interest only loans should be put in jail, 20 years, for fraud.

By: Monica, Phoenix AZ

Monica, Phoenix AZ — Tue, 23 Sep 2008 02:05:33 +0000

My goodness, I can’t even count how many comments I’ve read from people calling everyone who is upside-down or in trouble and facing foreclosure morons who are getting what they deserve. I hold a bachelors of science in biology, and my husband holds a bachelors of science in economics. We live within our means. We operate on a strict budget and never deviate from it. We have 0 credit card debt and our credit scores are well over 750. We both are employed at the same place as we were three years ago when we moved to Arizona. We decided to buy a house rather than throw away our money on rent. We were fresh out of college when we bought the house and were “green” to the home buying business. We assumed if our circumstances changed in a few years, we would just sell our house and move somewhere else. Not to mention, that is what the lenders (who were supposed to be the experts) were telling us. All we had heard is over time home values go up. No one I knew was predicting this painful crash back when we purchased. Everything looked rosy. We have made on time payments for the last three years – never once late, and always BEFORE the first of the month. Now, if anything changes in the next ten years – if my husband loses his job, if I lose my job, if I get pregnant, we will have no choice but to walk away. No adjustable rate. No purchasing a humongous home not within our means (we purchased our house for 234,000 and it’s 1400 square feet). Nothing irresponsible. But since we purchased the value has plummeted by $70,000. We were supposed to see this coming? We were supposed to somehow predict this? My goodness people, get off your high horses! And look over your shoulder, because all of you who are puffing yourselves up with pride because you got LUCKY and managed to escape this mess unscathed will have bad things coming to bring you back down to the level of the rest of us mere mortals. Get over yourselves, and whoever said people should be thrown into debtors prison – my goodness, I feel sorry for anyone that knows you. Heartless unfeeling jerk who is CLEARLY incapable of experiencing any form of empathy, and who heard a couple of stories about a couple of homeowners who bought ridiculously huge homes nowhere near their means with an adjustable rate and decided they were an expert on everyone else’s situation.

By: Brooklyn, NY

Brooklyn, NY — Sat, 20 Sep 2008 23:32:46 +0000

I think that home values in the U.S. are artificially blown up by the readily available mortgages/credit from all kinds of financial institutions. A financial crisis is bound to happen when 90% of Americans are living on credit. Leased or financed cars, mortgaged homes, financed TV sets and so on. Real estate prices wouldn’t be as high as they are right now if you had to put up at least 50% down payment on your mortgage. In a sense, our own greed and desire to have things we can’t really afford is what caused the current financial crisis. That and the fact that our banks eagerly and happily accepted our greedy desires in order to profit on them.

By: Paul "Corky" Teager Gig Harbor WA. 98335

Paul "Corky" Teager Gig Harbor WA. 98335 — Mon, 08 Sep 2008 19:20:59 +0000

From another angle, I am a Realtor in Gig Harbor, WA. For the last 20 years I have had income of over $250K each year. This year I have made $7,200.00 from a closing I had in March. No one ever thinks about the Realtor who can not get unempoyment and now can not refi our home. I have to walk away and as a realtor will not be able to buy a new home in years do to new guide lines set up with the banks. So I have no good feelings for thebanks that put us here in the first place.

By: Kathy Vienna, VA

Kathy Vienna, VA — Fri, 08 Aug 2008 19:55:50 +0000

There IS a more responsible alternative to walking away that will allow the homeowner to save some of their credit and land on their feet. You can negotiate a short sale — either take a course and learn how to do it yourself or have someone do it for you. Check out http://www.thenegotiatedsolution.com. This is an online video tutorial that teaches you everything you need to know to do it yourself. If you want help or want someone to do it for you…they offer Coach and Full Service options as well.

By: Enrique Roxas, Hauppauge, NY 11788

Enrique Roxas, Hauppauge, NY 11788 — Wed, 06 Aug 2008 16:21:11 +0000

I have posted a comment 3 months ago in response to the diverse opinions posted on this site and still the economy is worse than it was 3 months ago. The anticipated bottom has not hit and if it did, we will most-likely be on or near bottom for a long few years.
Has anyone has thought of a solution to walking away. I wanted to do what is right and not just walk away. I will hold on to my house as long as I can. PLEASE GIVE ADVICE OR SHARE YOUR EXPERIENCE TO A SOLUTION THAT WORKED IN PLACE OF JUST WALKING AWAY (e.g. – Short sell/Negotiate with Lenders/Put house on market/Bankruptcy/etc…).
“Us folks don’t have the political clout some Big Fellas out there who has blank checks to write off their debts from the Feds- All we have are just political schemes or mere rhetoric to vent off our steam with no action behind it”

By: Sassy, Ann Arbor, Michigan

Sassy, Ann Arbor, Michigan — Tue, 05 Aug 2008 19:29:48 +0000

Many so-called “responsible” homeowners complain they will have to carry the financial burden when distressed homeowners walk away. Where were you when the banks and mortgage companies swooped down on unsuspecting buyers/borrowers with clever marketing, slick promo’s and outrageous and unscrupulous apprasals? That’s the problem, we sit back in our little shells and watch the tragedy take place. Then we sit back further still and wag our fingers and tongues when it all hits the fan.

I’m certain a few of you knew exactly what was transpiring and could really see what was coming down the road. But nobody said anything! Nobody warned anybody! We continued to let the situation blossom until it burst. And like it or not: It’s too late to complain!!! The wheels are in full forward motion and I suggest you get ready for a long and bumpy ride.

I asked my CU how a home appraises for one amount at closing and another when it’s time to sell/refinance? It seems that when the bank wants to get you in a home, it will appraise for exactly the right amount. But it’s a entirely different story when it’s time to sell or refinance. The banks and credit unions will get their money, one way or another. It’s money game and we are the pawns!

Don’t place your financial future in the hands of hands of your local bank or credit union, they don’t care about you and your family!

By: Patrick, Lake Villa, IL

Patrick, Lake Villa, IL — Mon, 04 Aug 2008 15:31:47 +0000

I’m tired of hearing from people shaking the proverbial finger at would-be “walkers.” This environment could have been controlled better by lenders either demanding down payments or refusing to allow homeowners a certain percentage of equity. I’m not here to necessarily blame one side or another for this situation as this environment has been created due to a number of factors. I am a little disappointed though in hearing from people who don’t know what it’s like to suffer through a job loss or a financial shortcoming and have to provide for several children on very little money only to scold those who have. If you make an investment that gives you negative returns then do what you can to cut your losses. All I know is my family’s well-being is what’s important to me and if you don’t like my decision to walk away then turn your attention to other factors that lead to this situation.

By: Donna Hamlet-Pretlow - Millville, NJ 08332

Donna Hamlet-Pretlow - Millville, NJ 08332 — Sat, 02 Aug 2008 00:22:58 +0000

Fixed rate mortgage 20 yrs. Then Homecomings buys the mortgage and in less than 1 yr., they deny me the use of my equity and refuse to release payoff figures to other would be lenders. They committed a crime worse than rape. Each documented victim should receive $550,000 dollrs from GMAC/Homecomings and this still would not cover the pain and suffering this company has knowingly caused so many hard working American families. Who reaped the benefits from all of the stolen properties/equity taken? Will anyone go to prison for life? Will our government give us money to survive like it sending to Iraq? I work everyday and some of my money is in Iraq but the real terror is White Collar Crime in America. The greed, lies, stealing, and corruption has brought this once proud country to it’s knees. Please God! Save America.