You Walk Away | Goodbye, Mortgage?

A bad mortgage will not destroy you

What happens if you walk away from your mortgage?

Many people are looking to online payday loans and mortgage loan modification to break the frozen finances deadlock. Sometimes it isn’t enough, however. People find they cannot shoulder the burden of tremendous mortgages, particularly for homes that have lost much of their value.

If you walk away from your mortgage, what happens?

That’s what Web sites like You Walk Away are designed to help with. There used to be a time when refinancing was the only option for runaway mortgages, but the board has changed somewhat. Now companies like You Walk Away work to “empower homeowners who purchased their homes at the peak of the Real Estate market to take control of their financial future.” You need to understand your rights in this situation, and You Walk Away can help.

But what if banks walk away, too?

Here’s where it gets interesting. In light of President Obama’s recent recent directive to give defaulted homeowners a break during this difficult recession, many banks have stopped going after homes in foreclosure. Edward Harrison blogs on Credit Writedowns that people are unexpectedly being left holding the bag. A recent New York Times story tells the tale:

Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Tenants moved out, and the property fell into disrepair. Vandals had their way with it, too. Ms. James never anticipated what would follow:

The City of South Bend contacted her, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name…

… banks are quietly declining to take possession of properties because the cost exceeds the value of the Real Estate… bank walkaways rarely mean relief for the property owners… often (they) mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

What’s a consumer to do?

A good solution to this conundrum has yet to be found. Consult a mortgage loan professional and see what option is best for you.

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