Should I walk away from my home?

Question

I own a home in Florida that has become an anchor around my neck, and my wife's. The 1st and 2nd mortgage are starting to become a source of friction between us because we don't live in this home, and our tenants (who are family) aren't doing their part to offset the cost of even the 1st one.

I wanted to try and move back into it, but my wife refuses to do so because there's a lot of past memories there she would rather not face. I'd like to think that I am a man of integrity. I've always paid most of my bills on time, rarely missed a due date, credit is really good right now, BUT...I'm tempted to walk away.

Due to falling home values, we have negative equity in the home and the neighborhood has gotten worse. I'd like to be saving 2000.00/month which would really free us up to get on track paying off other debts and renting something smaller to live in until we've gotten clear of the credit damage. I already know that doing something like this would destroy my credit for the forseeable future, BUT...I'm just torn and I would just like some objective viewpoints on this.

Thanks,

Not a deadbeat, just frustrated.

Answer 1

go to credit counseling.  I think that can help you get on track.  And get involved with church and say some prayers!!

Answer 2

you can try to ask the mortgage company for the right to do a short sale and take no profit from the sale. being that you are not in distress they may not do it. you can also ask for a loan modification with the mortgage company since you can't refiance due to the negative equity and see if they will allow it  

Answer 3

No!because ur family loves u for a reason...maybe u might get in trouble or grounded or u cant go there but they are saying that stuff to help u and to protect u 2 so no don't run away stay at ur nice home where you belong.

Answer 4

I don't know how to advise you on this matter,but if it's effecting you to the point of depression then let it go,no amount of material possessions is worth your sanity,financially speaking it may cause some trouble but which one is the lesser evil,the debt or giving up the house.

Answer 5

Although it seems to be the american way (walk away and let everyone else suffer) and truly honorable person would find a way.

Try working with the lender, see if you can't work something out. See if you could rent it out to other than family for a higher amount leaving you less of a hole. Get a second job to make up the difference.

Walking away with throw all your hard work and good credit in the toilet. Try to stick it out and wait for the market to turn around so that you can sell it. There are also some tax advantages to owning a rental that may help offset the expense. You can depreciate the value of the building and write off other expense to lower your taxes which would help you to cover the mortgage.

Answer 6

Two ideas.

First, do your relatives/tenants have a lease with regular rent they're supposed to pay? If they don't have a lease, or they're not paying, then you need to either get them paying what they're supposed to or get them out and get other tenants. It doesn't sound like you can afford to be too nice.

Second, talk to the bank or whoever has your second mortgage. They have the most to lose, because if you walk away your first mortgagor will get the house and the second one will not get anything. See if they will reduce your interest rate, let you pay interest only for a while, something like that. You might even be able to sell the house and have the second lender give you a loan for the amount of negative equity.

If you really can't manage it, it's not the end of the world. For one thing, lenders deserve some of the blame for the problems people are having with debt because of their (the lenders') greedy and reckless practices, so don't feel too guilty. Also, you can eventually repair your credit, by being patient and by not getting into any more trouble. The best of luck to you.

  

Answer 7

You could always sell the house at a loss and agree to pay the bank the difference.  That would free up a huge chunk of money plus you would still be a man of integrity and everyone would know it.

When people walk away without paying the difference it hurts not just the bank, but stockholder, bank customers (in the form of higher interest rates) it hurts the USD.  (havent you noticed buying things from china is getting a little expensive now?)  and many other things.