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Posted: Tue Mar 02, 2010 3:08 pm
by Leisher
Walk away.
Think it's possible that banks will start blacklisting folks who go with the "strategic foreclosure" option?
Sure, it may be a good time to pull this, while the banks are swapped and they dare not do anything during this economic downturn, but what happens when things get better again? Will banks get all "The Bride" on people who walked now or will they forgive them, but put into place policies that prevent the trend from occurring in the future?
P.S. This would explain apparent and sudden financial windfalls the wife and I have noticed among a few people we know.
Edited By Leisher on 1267560544
Posted: Tue Mar 02, 2010 3:21 pm
by TheCatt
Interesting.
If it were as simple as walk away, they get the house, the end, I'd probably consider it if I were crazy in debt. Of course, I'd never be crazy in debt, so......
In many so-called recourse states, lenders can go after you for the difference between what the house eventually sells for and the amount owed. Lenders can seek a “deficiency judgment” against the borrower for that amount. It doesn’t happen that often these days, with lenders so bogged down with defaults, but it can. And new breeds of servicing firms are springing up to collect this debt.
I wonder how many states allow for that? Or if lenders would even bother considering how much more legal cost that is to them.
Guess they shouldn't have written all those crappy mortgages.
Edited By TheCatt on 1267561334
Posted: Tue Mar 02, 2010 11:20 pm
by Mommy Dearest
And we seem to forget the fact (or never knew it) that if you walk away and they foreclose the difference between fair market value and loan amount is includible in income in the year of debt forgiveness. some times it does backfire
Posted: Tue Mar 02, 2010 11:36 pm
by GORDON
That's crazy.
we need a revolution.
Posted: Thu Mar 04, 2010 9:37 am
by unkbill
TheCatt wrote:Interesting.
If it were as simple as walk away, they get the house, the end, I'd probably consider it if I were crazy in debt. Of course, I'd never be crazy in debt, so......
In many so-called recourse states, lenders can go after you for the difference between what the house eventually sells for and the amount owed. Lenders can seek a “deficiency judgment” against the borrower for that amount. It doesn’t happen that often these days, with lenders so bogged down with defaults, but it can. And new breeds of servicing firms are springing up to collect this debt.
I wonder how many states allow for that? Or if lenders would even bother considering how much more legal cost that is to them.
Guess they shouldn't have written all those crappy mortgages.
I wonder how long the bank has to file against you. They may have a couple years. So I'm not sure it wouldn't be in the banks interest. I know of a home here that a friend of mine walked away from several years ago. He owed 112,000. The house sold for 42,000. More than enough difference to pay a lawyer.
My work has been slow so we tried to refinance under the gov. program. We were late 2 times last year so we don't qualify. To me it was like WTF we are making the payments could just use a break by lower interest. They claim we have to stay with the same bank to use the gov. program. We have looked into just going to a bank that will deal. When the wife looked into it what I consider predatory lender came out of the woodwork calling. We will work things out and keep the house but the gov. hasn't done anything for me.