What if I don't pay my mortgage?

Question

I am in a situation where I can barely pay my bills. I am not late on any yet but my wife is about to be laid off due to her company filing chapter 11. And I see a really tough financial future on the horizon.

So what I was thinking is can I stop paying my mortgage and let the bank have the house so I can then rent something cheaper.

Is it as simple as they will take the house & i'm done or will they try and go after me.

Answer 1

They will take your house after you stop paying for 4 months. They will then sell it and bill you the difference of what they sell it for and what you owe on it (if there is a balance). They can garnish your wages to get this money.

Answer 2

They will sue you for the rest of the money once the house is sold.  Don't you think it would be better to go ahead and sell it now, instead of making things harder on yourself?  

Also, there are other jobs and I'm sure your wife will find one or perhaps you could get a second job until she does?

It sure seems like you are throwing in the towel before the fight even begins - if there will even be one.  You are going to ruin your credit and future.

Answer 3

Short sale- sell it for less than you owe the bank if the market is bad in your area. The bank should waive the balance owed but may send you a 1099 as income. RENT IT OUT till you get back on your feet. The banks are in the mortgage business not the real estate business, they really don't want your house, call them and work with them.

Answer 4

But what most people don't seem to understand is you need to talk with your lender to see if they will work with you. Call them today and ask for the "loss prevention" dept.  I can tell you from my experience that they don't even want to talk with you until you are late on payments.  They want you to try everything you can to get the house sold first.  I realize you may be upside down in the mortgage. You need to put the house up for sale. After 90 days they will be glad to discuss options, one might be short sale, another deed in lieu of foreclosure. Our lender actually told us that if we make a full payment every 89 days, it stops the foreclosure clock. You have to pay them online for this to work. This might buy you some time for you wife to find another job and catch up on all your debt. Just because you're upside down, doesn't mean you should give up the house. If you can afford the payments stay and make them. The market will turn around again.  But you have to take this one step at a time and do it their way. You have to work this and it won't be easy. It's stressful and heart breaking, but if you don't do the steps, you will be uncreditworthy for  many years.  

I'm still in my house, it hasn't sold. We've lowered the price to almost the assessed value, which is less than the mortgage amount.  But we have to keep playing the game until it's over.

Answer 5

once your house is taken and sold, the bank will sue you for the rest of the money. the bank will have a very good story on your credit report.

Answer 6

The bank will foreclose on your house, sell it and sue you for the difference between what was owed them and what they sell it for. Your credit also goes down the drain. I'm sorry that you are in the same situation that so many others are finding themselves in.

Answer 7

Why don't you just put the house on the market? That way you can save your credit, it is a very valuable thing in today's world.

Answer 8

No, it isn't quite that simple.