What problems should I expect if I walk out of my mortgage?

Question

I have a home & mortgage under my name. But I don't own it. It belongs to my ex-brother-in-law, who purchased it. He fled the country now. Its hard to sell and location is too far. I don't want the home & don't want to pay his mortgage. If I walk out, the bank takes possession, right? What problems should I expect? Will it affect me, if I purchase a home 2 years from now?

Answer 1

You won't be buying anything in 2 years.

Your credit takes a hit of about 260 points, and your foreclosure is apparent on your credit report.   You may not own the house, but you do own the debt.

It is possible that you will continue to owe the debt after you walk away, it depends on the loan, and your state.

You would be better to sell it or have your sister refinance it as this is really her deal not yours.

Answer 2

If you walk out and the bank forecloses, you can pretty much forget a mortgage in the next few years.  The foreclosure will go on your credit report and lower your credit score quite a bit.  Very few mortgage companies would be willing to take a flier on someone who has already defaulted on one mortgage.  If you can find someone to advance a mortgage to you, it will most likely be at high interest rates.

Answer 3

If your name is on the mortgage, then it will affect you - because that is the definition of ownership. If you walk away from the mortgage and default you probably won't be able to buy a home for quite some time. I would suggest talking to the bank and asking them to do a short sale - where they take the home away and clear your debt to them. A short sale still affects your credit (for 2 to 5 years) but not nearly as long as a walking away and having the bank foreclose on the house (I want to say 10 years).

Hope this helps!

Answer 4

Your credit will be destroyed and you will have trouble for many years getting any credit but that probably about it.  Sometimes (depends on the loan) the bank can come after you for a "deficiency judgement" and if you have other assets they can come after those assets, but if its going to be hard for them to do this they may just not bother (and again may not be able to do it for some loan types).  Still, guaranteed your credit will take a huge hit.

Answer 5

If the bank takes the home, you won't be able to buy your own home for at least 3-5 years due to having a big "FORECLOSURE" tag on your credit.

Use this as a life lesson, DO NOT co-sign for mortgages or car loans, ever!  If the other person can't qualify themselves, they should not rope other innocent parties into their scams.

Answer 6

Kiss your credit good-by.

Lawsuit.

Try renting it.

Answer 7

Your credit will be shot and if the BIL is thought to have committed fraud you might be an accomplice. You better contact the bank ASAP.

Answer 8

You're not too clear on this.  IF the property is in your name-- you own it, not your brother-in-law who is a jerk and fled the country.  And this will create multiple problems for YOU.  It will negatively impact your credit, and probably prevent you buying another home unless you ACT now..

Suggest you immediately contact lender--you have every right, it's in your name.  Find out situation, how much in arrears, have they filed for foreclosure.  You may wish to rent out house to help pay the mortgage payments.  You may wish to do a Deed in Lieu of Foreclosure, or sell the property, or do a short sell.  TALK to the lender and find out the situation and your options.  Talk to more than one person there.

Answer 9

Here is an article from the Washingto Post.

http://www.washingtonpost.com/wp-dyn/con...

This is the reason you should NEVER HAVE CO-COSIGNED

YOU will be responsible for the balance and the IRS will come after you.  You should see a lawyer.  You can't just walk away.