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Can I Safely Walk Away From My Mortgage?

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Mortgage Professional America | 10 Feb 2012, 02:10 AM Agree 0
And do these principles apply if I Short Sold?
  • Maureen Spiegleman | | 11 Feb 2012, 01:36 PM Agree 0
    While these statutes might prevent legal action, they will not stop derogatory reporting of non- payment to the various credit reporting bureaus. Be prepared for denial of other credit such as car mortgages or credit cards. It may even be difficult to find a rental. Once you walk away from a mortgage, or sell through a short sale the bad information will stay on your credit report for seven years. That said, I would personally walk a way from a mortgage than ruin the rest of my credit because I couldn't make other payments. Any consumers will leave all other bills unpaid as they scramble to make the house payment for a period of time. By the time the home owner accepts the fact they they are going to loose the house they have trashed all the rest of their credit. It takes a lot longer to repair one's credit if other consumer debt.has been reported delinquent. Plus there is no consumer protection against creditors other than mortgage lenders pursuing legal remedies for non-payment. My advice is once a consumer realizes there are cash flow issues at home, to contact the lender and try to get a forbearance if the problem is short term. Otherwise, I would make all other payments first and keep making them on time and let the house go.

    Remember, every state is different and I would contact a consumer counseling agency to determine the legal ramifications of any action before determining what are the consequences.
  • William Matz | | 02 May 2012, 02:28 PM Agree 0
    The article incorrectly states California law with respect to junior liens and short sales. 580e was amended in June 2011 to make junior liens also subject to the anti-deficiency protection. This can offer the best chance for a borrower with a 2d to eliminate liability on a 2d that was not purchase money.
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