What will happen if I walk away from my mortgage payments?

Question

Folks, I had enough paying to much for my mortgage and the property value already decreased by 90.000 $, so basically I will try to forclose the d**n property and give the headache back to the greedy lender. It's a Townhouse In CA. Thank you to those who understands what millions of people going through.

Answer 1

You have 2 options before you let the lender foreclosure your house: try talk with your lender and do loan modification or if you don't want to live in this property- try to do a short sale.

Both options are less damaging for your credit, then foreclosure.

Answer 2

Depending on what your balance is, you might could sell to an investor for less than market value. (payoff or so) That way it wouldnt damage your credit when your ready to buy something else.

Answer 3

If you resided in the townhouse when you took out the mortgage there are anti-dificiency laws in California which protect you from any liability. There is one huge exception., many people have 2nd mortgages which are credit lines, lines of credit, (Heliocs) which carry personal liablity after the foreclosure. So, if you only have one mortgage, you walk away free. If you have a second straight mortgage, you walk away free. If you have a credit line, you will still owe it. Again, this applys only to residential property, not rental property.

Answer 4

Shoulda done some research before signing a contract :) im sure they didn't force you to let them give you money by gunpoint lol

Answer 5

My husband and I have a similar problemwith a home that we own.  Check with your mortgage holder andask about doing a Deed in Lieu of  Foreclosure.  That means they agree to take your house back without going through the ordeal and expense od foreclosing on you.  Your credit will still take a major hit, but it is better than the stress of a foreclosure.  We are going to do a DIL.  Ask your bank and see what they have to tell you.

Good luck

Answer 6

You will mess up your credit for years to come, you will have a hard time finding jobs, getting credit, even getting auto insurance.  And, if you are able to make the payments, which it sounds like you are, you won't have a compelling reason to go into foreclosure.  You can't just walk away for convenience or frustration, you have to exhausted your abilities to pay.

I understand what you are going through.  I wanted to also, take the keys to the bank and say "Here you go!  You can have it!  It's all yours!"  But I didn't.  I sold the house, and lost $40k in work I put into it and had to take $6k to closing just to sell it.  Had I bought the house at the height of the market, I would be down $100k now.

All I can say is hang on to it.  The market WILL get better in 2-3 or so years.