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Need Advise on "Walking Away"?

Posted on: 09th Mar, 2009 12:10 pm
I am currently about 40K under water on my current mortgage + home equity line. I am employed and currently able to make the payments, but the mortgage is on a 5-year ARM that will be adjusting soon and it may no longer be feasible to keep the mortgage current. I would like to move on and have somewhere I can stay for a few years while I build up savings. What are my best options for walking away from this mortgage? Selling is highly unlikely and even so I would still owe the bank the difference. Is a deed in lieu my best bet? What do you suggest? What is the best way to minimize the impact on my future credit?
hi troubled,

in your situation deed in lieu is, of cousre, one of the good options. but a deed in lieu and a foreclosure have almost a similar impact on the credit. a deed in lieu lowers your credit by almost 250 points and it remains on your credit report for about 7 years.

but since you said you are currently employed and are able to make payments, why don't you go for a loan modification? you can negotiate with the lender for that. you need to send them a hardship letter and convince them about the difficult situation you are facing at present and how difficult it will be for you to make payments once the rate starts adjusting. you can also take help from a loss mitigation expert or a lawyer in this regard.

thanks,

jerry
Posted on: 10th Mar, 2009 03:37 am
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