Posted: Sun Feb 06, 2011 4:30 pm Post subject: Ramifications of walking away from mortgage?
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I’ll try to keep this brief. In march 2009 we purchased close to an undesirable neighborhood because it had the lowest taxes around ($2900) close to the area we wanted to be. We were business owners and had to file chapter 7 immediately after purchasing the home due to creditors placing items under our names instead of the business. Shortly after we purchased, they announce that the property taxes were going up – and they did to $8000 – a dramatic increase. We decided to suck it up and stay due regardless of our payment going from $2000 to $3000 (due to escrow) and simply cut back expenses, sold one car, reduced cable tv etc. Then in 2010, they announce the taxes were going up again, and they did, my taxes are now 10,800.. and the news says they are trying to raise them 79% (google - newburgh NY property tax increase). This is out of control. I make good money, but we basically do not have nothing left every month after the house payments and such. The market is so crappy, that I could not eve sell the house for what I paid for it and cover the realtor fee.. I would have to come up with $20K or so out of pocket, which I don’t have, we are living paycheck to paycheck after the escrow changed. No vacations, no dinners out, no nothing.
We would like to ‘walk away’ and move in to a rental house (which we can get for $1200 to $1300 decent size) and save money. We don’t mind not having a house for a few years so we can save again. My question is, if I start saving and they see $40-$60K in the bank in a year or two, will the bank come after us? We cant file bankruptcy again because I am now employed (was not when I filed) and make good money. And I’ve already filed in 2009. My scores stay surprisingly good, 660 mid, which kinda shocked me.
My intention is to stop paying the mortgage, stay in the house and save the payments, until I have to go, then go rent. How bad is this? What can this do to me lol? Will they come after me with a flurry of attorneys?
If you let the lender foreclose the property, then he will be able to come after you in order to collect the deficient balance. I will suggest you to contact your lender and apply for a deed in lieu of foreclosure in order to get rid of the property. After a deed in lieu of foreclosure, the lender won't come after you for the deficient balance. _________________ Procrastination is the enemy of your financial success
lincoln Guest
Posted: Mon Feb 07, 2011 6:47 am Post subject: thanks Adonis for the reply.
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But im current in my mortgage, will this be a problem?
Also - will the town come after me for the taxes or is that some how rolled in there?
If you are current on your mortgage payments, then the lender may not agree to your request for a deed in lieu of foreclosure. Lenders normally agree to it only when you're delinquent on your mortgage payments. The town may come after you for the property taxes unless the property is sold off at the auction.
Posted: Thu Feb 10, 2011 8:46 am Post subject: chapter 7
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thanks Sussane. One more question. both my wife and myself are on the mortgage and deed/title. what happens if ONE of us, say myself, files for bankruptcy chapter 7 protection, but my wife does not, how is that looked at from the bank?
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lincolnc
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