What happens if we just walk away from our home and quit paying for it?

Question

What happens if we just walk away from our home and quit paying for it?

Answer 1

eventually bank takes it back. could be somebody tries to prove you're skipping out on debt, and that constitutes fraud. Property ownership is a responsibility. If you don't want the house, cash in the equity before you disappear.

Answer 2

the bank will come and take it away from you and most likely sell it as an auction....to the highest bidder...

Answer 3

Years ago, my husband and I seriously considered doing this.  We needed to move, our house was too small (we'd just added triplets to the family and already had a young child) and had depreciated to the point that if we sold it we'd lose a lot of money.

My husband found out about something called selling short or a "short sale."  This is where the bank pretty much forgives what you owe, and buys back the house at market value.

We had to write to the bank and explain why we wanted to do this, and we told them we were considering walking away, but didn't want to do that.  The bank, not wanting us to just leave the place, offered the short sale.

Long story short, the house we paid $121,000 for (in 1986) sold for $77,000 (9 years later).  The bank took the $77K and forgave $23K we still owed them.  

It was the best thing we ever did, though we had to start all over, equity-wise.  It was worth it, though.  

We wound up renting for 10 months and saving like crazy to get a downpayment on a house.  We did it, and are still in our house today.  Funny: THIS place has DOUBLED in value (at least).  I'd love to sell it and take the profit, but I don't want to disrupt my kids and their school/social life.  So we're just waiting until they all graduate.

Answer 4

it gets foreclosed on, they take it out of your name, and your credit gets worse, and you have a harder time buying or renting the next time.