Can I Just Walk Away From My House and Mortgage?

Historically, homes face foreclosure when the homeowner cannot afford to make the payments.

Usually, the homeowner has tried to get a mortgage modification or other relief, and makes some payments, misses some, and tries to send in what he or she can.

A strategic mortgage default, as explained by Larry Doyle, is a homeowner who is current, and just stops paying.  Period.

Why would anyone do that?

The statistics show these defaults are in areas with high numbers of homes worth less than what is owed.

So, the homeowner may have enough money to make the payment, but decides, hey, I owe $300,000 on this place that is now worth only $150,000, why should I keep paying?

I talk to people who tell me hey, the guy bought the house next door, same as mine, for $100,000.  It had been foreclosed.

And I owe $200,000 on my house, can you help me?

No, not if you can afford the payments out of your income.

Worse yet, you are paying your taxes, too, so they got you going and coming, getting money for their mortgage out of your right pocket, and bailout money from the government (you) out of your left pocket.

There still is no way to force mortgage companies to modify a mortgage.

And only 1.9% of the mortgages actually modified last year reduced the principal.

Some people bought a new house and walked away from the old, so called buy and bail.

Last year Fannie Mae and Freddi Mac issued new rules to prevent that from happening.

But, depending on your state’s foreclosure law, you can stay for many months in your home, without making any payments.

Just to top it off, neither the mortgage industry nor the government factored in these type of defaults in estimating future foreclosure rates and mortgage losses.

Can I Just Walk Away From My House and Mortgage?

Related posts:

1. Walk Away From Your Home, Advises Report
2. Troubled homeowners not confined to those with “too much house”
3. Should you “walk” away from mortgaged home