To Walk Or Not To Walk...that Is The Question
To Walk or Not to Walk...That is the Question:
Sure, there are loan modification programs out there. But how effective are they? And do you
even qualify? Many Americans are wondering whether to hang on to a hopeless mortgage, or
just walk and live on to a buy a house after foreclosure.
There could be a number of reasons for being in this position. Perhaps you have been hit by the
recession and lost a job. Perhaps medical bills weigh you down. More likely the value of your
house has depreciated so much, its just not worth it to stick around anymore. Why wait for ten
years for your house to regain its value, when you could be paying less for a better place right
now?
These are not easy questions to think about, however you should not believe in the myth that
walking away from your mortgage is the end of your financial future. It is better to deal with
the lender directly in order to reduce your payment. But since many lenders are not willing to
negotiate, you might have to walk.
You have several options- you could go for a short sale, attempting to get the lender to accept
less than the original mortgage agreement. You could also attempt a deed-in-lieu, which
involves giving the deed of the home to the bank in exchange for the bank not foreclosing on
you.
Of course its possible that your lender will just go ahead and adjust your mortgage anyway.
There are so many people who are having trouble paying, that if you just play chicken enoughyou
may get your way. But be warned, the bank is as good at this game as anyone, and they can
get very threatening with going after their money.
Remember, there are certain states that dont even allow the banks to persecute home owners.
Do the research and see if you live in such an area. And better yet, talk to a lawyer. You want
to make sure that the bank is not going to pursue legal action against you, so you can go on to
buy a house after foreclosure. That means no matter which action you take, a lawyer should be
involved somewhere along the way.
What complicates this issue is that its often near-to-impossible to get someone at the bank to
respond to your efforts to negotiate. Not to mention there are tax dimensions to negotiating,
getting a second mortgage, or walking away. Make sure to speak to the person who does your
taxes. Often times, if a lender does forgive a certain amount-- this is considered INCOME that
can then be taxed.
Overall, its important to do the research and weigh every possible option. In the current market
however, many home owners successfully walk away, and go on to buy a house after foreclosure.
Presented by http://homeloanacademy.com/and visit us for more information
by: Home Loan Academy
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