 kim090807
Joined: 20 Sep 2009
Posts: 55
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Posted: Mon Oct 05, 2009 9:02 am Post subject: Consequences of Walking Away From Mortgage
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My husband and I were responsible borrowers. We built the house of our dreams. It was on the high end of our budget but we could afford it. The dream fell apart when cracks started to appear in the ceiling, walls, and foundation.
In short we found out that it was built on hydro-collapsible soil. (When the soil gets wet it collapses.) The minimum to fix is $50,000 but it could be as high as $100,000. Our contractor can't afford to fix the house even though the soil issue was discovered during the warranty period. He "said" he would file a claim with his insurance company, but he is dragging out the process. We hired a lawyer to help us through the process and make sure our rights were protected. We have plenty of evidence that our contractor, the city, and the developer knew there was a soil problem but built anyway. (3 out of the 6 phases have this problem.) We cannot rally homeowners to file a class action lawsuit (it is a small town with a corrupt government). The other kicker is that the insurance company has a clause in the policy that may not cover the cost to fix the problem. With the market being what it is, there in a zero chance of a home equity loan for us to cover the cost of the repairs. (Not sure we should.) So we are forced into expensive litigation to a contractor that can't afford to pay and an insurance company that wont pay.
So here is the million dollar question. We are new facing the fact that our home is a lost cause. So what is the impact if we walk away? Are there ways to minimize the damage to our credit? This is not our fault. There will be no government bail out for us. Or do we continue to throw money into it and hope?
If we surrender to home, how do we get in conact with the lender. Is it possible to send a letter? |
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jenkin7
Joined: 04 Jun 2007
Posts: 4537
Location: Hawaii
728.43 Dollars($)
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