Drowned by one bad investment!

Guest

I purchased a house in 05 - just about the ideal time to buy a house! I got a market analysis done on it last month and it came in at 170k and I got it for 240k - And I think the 170k is wishful. The house also has a mold issue that was a previous condition unknown to me when I purchased it. Insurance has no recourse and the house puts many basements to shame with the must and mold situation. I try not to think of the health implications. I looked at the tear down / rebuild equation, and the economics just aren't there.

I like to think I'm financially responsible. I have no credit card debt, buy used cars with cash, and I make good income. I also lost my job mid June this year and my savings are shrinking, but still ways above the exemption range. I'm doing contracting work now, but starting things in motion is taking a while longer than I had hoped.

So I'm clear that I'm walking away from the house. The amount of work it needs and how expensive it is for it's size, it just doesn't work. I'm trying to figure out how to do it best to preserve my savings and a financial future.

Advice would be much appreciated

Brian

sara · Posted: Wed Oct 28, 2009 2:17 am Post subject:

Hi Guest,

Once you walkaway from the property, the lender will foreclose it. After the foreclosure sale is over, you will be responsible for the balance amount resulting from the sale. If you are unable to pay off the balance, the lender may garnish your savings account.

In my opinion, you should try out for a deed in lieu of foreclosure. You should speak to lender about this and check out if he agrees to it. If the lender agrees to a deed in lieu, then you won't be responsible for the deficient amount resulting from the sale.

However, in both the cases, the credit effect would be the same. Both of them would reduce your credit score by 250 points and would remain on your credit report for 7 years.

Take care.

manoj_gopale · Joined: 16 Feb 2009 Posts: 481 0.49 Dollars($)

walking away from the home is really a tense situation to go along with.Rather it will hurt you both creditwise as well as with emotions.So if you want to walk away what are future plans about living,purchasing or renting a new home.
All these things are need to be decided first and then it can be termed a wise decision.......

keep in touch....

gmakerley · Posted: Fri Oct 30, 2009 2:29 pm Post subject:

walking away means you've given up all hope, of course; but it also means a credit history torn to tatters and a potential large debt hanging over your head if the lender sees fit to seek a deficiency judgment.

mold remediation wouldn't seem to be that expensive, though you did cite other issues with the home that would require repair. i don't know if there is any solution that is truly satisfactory, but you seem to be looking for something that is favorable which simply doesn't exist. if you're walking away, don't look back. after all, you never know who's following you.

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