Walking away from mortgage- please no flames here just advise or experiences

[Hannathy]

Take in roommates. Dip into that 401k. Go back to court, say that the situation has changed drastically and ask for an adjustment. This isn't some disaster like a sudden illness this is someone looking to bail as a financial option. That should be a desperate last resort not a result of financial planning.

I agree why should the rest of us pay so she doesn't have to touch her savings?

That is what the savings is there for, she should use it not expect me and you to pay for her.

And before you get on me I know what I am talking about and have been there and did tap into the 401 to pay the bills and would do so again BEFORE ever WALKING out on my responsibilities.

 

[Derby4me]

I agree why should the rest of us pay so she doesn't have to touch her savings?

That is what the savings is there for, she should use it not expect me and you to pay for her.

And before you get on me I know what I am talking about and have been there and did tap into the 401 to pay the bills and would do so again BEFORE ever WALKING out on my responsibilities.

First off, a 401K is NOT "SAVINGS". If you've been there, you should know the difference.

Second, why do people have to make snotty comments when a person is asking for suggestions and asks specifically, "please no flames here just advise or experiences". Say something helpful and constructive or keep your trap shut. She already said she's not sure what she's going to do.

 

[summerrluvv]

Short sales are pointless, they ruin your credit despite what people tell you. The only person that makes out in a short sale is the real estate broker that still gets a commission and the buyer.

You can walk away and chances are you won't be sued for the deficiency. If you are, you can file BK and wipe it away. BK, foreclosure and short sales ALL ruin your credit. There really is no "one is better than the other". At least with a BK you CAN get a mortgage, car loan, credit cards, etc. a couple of years after the discharge since they know you can't file again for 8 years.

 

[snarlingcoyote]

I agree and as someone else pointed out if the bank sends you a 1099 on what they eat you WILL have to pay taxes on that.

Short sales do not hurt your credit as much as a foreclosure.

http://www.mortgagereliefformula.com/06/20/how-bad-does-a-short-sale-hurt-your-credit/

on what ever you decide to do, you must do what is best for you and your family.

If the bank sends you a 1099 for the foreclosure on a primary residence, you simply file a 962 to exempt that from income.

 

[Wish I lived in Fl]

If I was in your shoes I would let go of the house and would not touch the 401k.

 

[summerrluvv]

..and I dunno what state you live in, but in NY it takes about a year of non payment for a bank to foreclose.

 

[Hannathy]

then what is it? It is money that you have put aside for retirement. It is savings just called something different.

And one of the reasons you can withdraw money is to prevent the foreclosure of your home.

she can use her 401 money and should.

 

[summerrluvv]

then what is it? It is money that you have put aside for retirement. It is savings just called something different.

And one of the reasons you can withdraw money is to prevent the foreclosure of your home.

she can use her 401 money and should.

Withdrawing the money will only get her so far. What happens 4 months down the road when she still has no job? How does the mortgage get paid?

 

[Purseval]

First off, a 401K is NOT "SAVINGS". If you've been there, you should know the difference.

It's MONEY. If you've ever been in a situation where you HAD to use it you would know that.

Second, why do people have to make snotty comments when a person is asking for suggestions and asks specifically, "please no flames here just advise or experiences". Say something helpful and constructive or keep your trap shut. She already said she's not sure what she's going to do.

One person's snotty comment is another person's tough love When they make you the trap shutting mod we'll worry about shutting ours. Until then everyone's opinion is valid. Perhaps the OP will find a workable suggestion in a post by someother other than the ones who made you approved list, you never know.

 

[Hannathy]

First off, a 401K is NOT "SAVINGS". If you've been there, you should know the difference.

Second, why do people have to make snotty comments when a person is asking for suggestions and asks specifically, "please no flames here just advise or experiences". Say something helpful and constructive or keep your trap shut. She already said she's not sure what she's going to do.

She asked for experiences and I related mine. We didn't walk away from our bills we sacrificed our retirement savings and paid a big price for doing it. So I think I actually answered the request more than some.

 

[BellePrincessBelle]

A forclosure will preclude you from getting mortgage for 7 years a BK will only take 2 years to qualify for an FHA. TAke it for what it's worth.

 

[Planogirl]

We were in a bad way at one time and wiped out our savings. Yes, we still have our house but nothing else (except a pension - may it survive) including savings. I'm not convinced that this was the best approach even if we did save some people money.

 

[Purseval]

Was this really necessary?

Rather than kick someone when they are already down, I prefer to sit here and thank God that I'm not in the OP's situation right now..

Actually that wasn't a knock on the OP, who was floating trial balloons. It was a response to the other posters who thought walking away from a mortgage was actually a pretty good idea.

 

[punkin]

Actually that wasn't a knock on the OP, who was floating trial balloons. It was a response to the other posters who thought walking away from a mortgage was actually a pretty good idea.

Walking away from a mortgage is not a good idea, however, the OP doesn't really have a lot of good possibilities left. At his point walking away may be the best of a range of bad possibilities.

 

[Hannathy]

I'm a bit confused at how she came thru a divorce and still has the whole house? Wasn't the value of the house included in the settlement? so is she talking about walking out on her half? Or did she buy out her DH? Or didn't he pay her?

We need to get back to the days of having to have 5% saved before buying a house, it kept people to houses within their means a lot more often. Or else having Bankruptcy affect your credit a lot longer or more severely.

 

[shelbys mommy]

We walked away from ours 7 years ago. DS was born & hospitalized twice with RSV, at 3 weeks old he stopped breathing on me 3 times. DH's insurance would not cover the meds my son needed. We were faced with pay the house note or get baby's meds. My son's medication came first. I miss that house, but I do not regret it at all. It saved my son's life. Good luck!

 

[marydmjj]

Short sales are pointless, they ruin your credit despite what people tell you. The only person that makes out in a short sale is the real estate broker that still gets a commission and the buyer.

Seriously? I would strongly beg to differ that the real estate broker makes out in a short sale. The commission is always cut at least in half and the amount of time it takes to process a short sale on the agents side is ridiculous. We are lucky if we make any money on a short sale.

Your credit is going to be damaged whether you have a short sale, foreclosure or bankruptcy. The level of damage is different with each one. In a short sale and a foreclosure, the lien holder can, and often will, issue a deficiency judgement. That means you will owe the difference between what is owed on the mortgage and what the house sells for. If you go with a bankruptcy then that debt is wiped completely clean. Keep in mind that there are tax ramifications as well. If you sell short or the house is foreclosed on and the lien holder doesn't file a deficiency judgement, you will owe taxes on that amount as if it is income. I hope that makes sense.

 

[Amandaj0831]

I am also in the middle of a divorce and it is hard for many reasons. I would advice against forclosure. In times of high stress we sometimes make decisions we regret. to What about a new place to live after your credit takes a hit? You may not have the opportunity to buy a house for several years because of the hit your credit takes. Who knows where you will be in that time? Even apartments look at your credit. Job applications look at your credit. If you have too, you have too but try your best to find some way to work it out.
((hugs))

 

[luvmy3]

I'm a bit confused at how she came thru a divorce and still has the whole house? Wasn't the value of the house included in the settlement? so is she talking about walking out on her half? Or did she buy out her DH? Or didn't he pay her?

We need to get back to the days of having to have 5% saved before buying a house, it kept people to houses within their means a lot more often. Or else having Bankruptcy affect your credit a lot longer or more severely.

How do you know that when the OP and her dh were married and had dual income that their home wasn't within their means

OP, I don't have any advice just wanted to say that I hope everything works out for you, whatever you decide.
I do wonder how you will be able to get another mortgage or even a rental agreement if you just walk away? Do you plan on purchasing a smaller more affordable home? I'm sorry if its been asked an answered already, I haven't read the whole thread.

 

[disneygal2007]

I am really sorry for what you are going through OP. Times are very hard for everyone. My advise please don't walk away from your house. The banks are taking extreme measures to get their money including law suits. Good luck and disregard all the negative posters. I guess they have never been down on their luck.