Walking away from your house/mortgage

Anybody done it? Here's the story: I'm in one of the most economically depressed areas in the country. My house is going to be worth barely more than I owe when the property values drop again this year and the house next door to me (which is in pretty good shape) just sold for $3K after being foreclosed on a few years back. I'm going to be moving in with my girlfriend soon and the last thing I want to do is put a couple of grand into my house and make mortgage payments for a couple of years only to see it not sell (which I am POSITIVE it won't for more than I owe). I still have 12 years of payments to make. So I'm wondering, other than having my credit rating go in the dumper (which I really don't care about since I'm driving a new car) what kind of consequences am I looking at? Will the mortgage company sue me? Anybody? Anybody? Bueller? Thanks in advance!

 

I don't know much about this, but new car or not, I would be horrified at what this would do to my credit rating. Seems likes all kinds of potential trouble down the road.

 

Your credit rating can get repaired and you probably could get a house in a few years without any other blemishes. The problem is the difference from what the bank gets from a foreclosure sale and the balance on your mortgage would be considered income.

 

And don't forget the moral angle of living up to a responsibility you took on. It doesn't sound like you're destitute. It sounds like you can afford the payments. So you should make them until you sell the house.

 

That really depends on the state your are living in.

But fuck the moral angle. You entered into a business agreement, which specifically stated what would happen if you didn't pay. You certainly have the moral right to stop paying if you agree to accept the consequences.

 

Personal responsibility is so 20th century.

 

There's nothing irresponsible about it. Our entire economic system is based on the idea that everyone should pursue their own best interests within the confines of the law and any personal agreements that are made.

If an agreement says "You will do X, or else face Y," there is nothing immoral or irresponsible about choosing to face Y.

 

check the state where you're living. Some -- california among them -- do not allow the lender to chase the owner for anything owed. consider what the default will also do to aby other credit you have outstanding -- including changing the terms of your loans and even calling them (including credit card balances).

how long is you mortgage? what's difference in pricing where you live between renting and owning,and will anyone rent to you after your credit plummets? are you no longer collecting the interest mortgage deduction? why are you selling in a couple of years? in other words, why wouldn't you just keep living there?

 

Basically, I'll be getting married in the next six months or so otherwise I'd keep living in the house. As for my moral obligation, uh, my city has one of (if not THE) highest unemployment rates in the country. I lost my job but when I got it back I took a HUGE pay cut. I'm barely making ends meet as it is and when I tried to contact the mortgage company about getting some help they were major pricks and said I wasn't eligible if I could make the payment. Which I can but then what do I do when I move? Continue to pay on a house I can't sell next 12 years and have no money to contribute to my new household? And the way things are going here, nobody is going to rent the place for anywhere near what I'd need them to. There are so many available places around here. No offense, but fuck my moral obligation. Where was the moral obligation of all the Wall Street big wigs who helped get us in this mess and why should I worry about a mortgage company that doesn't give a shit about me? I'd love to find a better answer but right now I don't see one. And I don't want to make mortgage payments for two years only to be stuck with a house I still can't sell.

 

Why doesn't your wife move in with you instead and you keep that house?

 

Oh, and some info:

http://www.youwalkaway.com/

http://articles.moneycentral.msn.com/Banking/HomeFinancing/WhenToWalkAwayFromAMortgage.aspx

 

Some states don't allow lenders to chase borrowers for what they contractually promise to pay? No wonder modern society doesn't understand personal responsibility.

TwoGloves, I'm sorry about your layoff and pay cut. Really, I am, and I'd probably be more sympathetic if you had mentioned that in the first place. But there are always options. Why can't your girlfriend sell her place and move to yours? Or rent your place; even if you don't make the whole mortgage, you'd be making most of it.

Your comments about driving a new car so you don't care about your credit rating and "I don't want to make mortgage payments for two years only to be stuck with a house I still can't sell" don't sound like a guy who's broke and going under. They sound a guy who's pissed off and just looking for any way out.