How Long Can You Stay in Your Home After You Stop Paying the Mortgage?
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God Bless Our Foreclosed Home Even though the economy seems to be getting better, the number of mortgage delinquencies is still rising. Some homeowners are choosing to walk away because their debts are much higher than what their houses are worth, and many others just cannot afford their mortgages any longer. Although I am not thinking of walking away from a mortgage, I wondered how long those who stop paying their mortgages can live in their homes before the lenders kick them out. Here are some real life examples of people who lived in their homes for months or even years after stopping payment.
Martha Shickley
According to this recent Wall Street Journal report, the Shickleys decided to stop paying their mortgage in August, 2009 and have not even received a default notice as of March 2010. That is a whole eight months of free housing and it is not over yet. This family stopped paying because they have an interest only mortgage and is now using their money to pay off other debts.
Ron Nash
This man was featured in the CNN Life After Foreclosure slideshow and he vacated his home after not paying for the mortgage for 18 months. He feels that he "landed on his feet in just about every way." His mortgage was $5,600 a month and he moved his family into a $1,900 a month rental..
Shawn Aaron
This Florida homeowner stopped paying for the mortgage on his 5,800 square foot home more than two years ago. He says that since his loan was sold to a new lender he doesn't have a contract with the new lender and does not have to pay the mortgage. He even started a company to help homeowners fight banks.
Louis Tondu
This airline mechanic stopped paying in June 2009, and was still living in his residence in February 2010. He said his bank has not filed a notice of sale and expects to live there until May 2010.
These are just a few of the many homeowners who decided to stop their mortgage payments. Although these few cases are by no means conclusive, the general political and corporate policies of the present are stretching out the length of time people get to stay in their houses after stopping payments. Some homeowners are even finding that they were not foreclosed on after they moved out because banks deemed their properties to be too costly to take back.
Recently Paul Michael of Wise Bread wrote about his thoughts on walking away from his mortgage, and if he really does it I would be interested to read about how long it takes the bank to actually get to the stage of eviction. Are you more likely to walk away from your underwater mortgage knowing that you could possibly live in the home for another two years?
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Ugh. More of this? C'mon WiseBread. It's like you're putting your stamp of approval on walking away from a mortgage. Instead, why not inspire people to live a little more frugally and deal with the situation they decided upon? That's what I thought your message was... or was supposed to be.
No matter how much you try to convince yourself, defaulting on your mortgage doesn't just hurt the "Banks." It hurts all of us, including the people who live in your immediate community and people who live on the other side of the country. If you can no longer afford your house or it's worth a lot less than you still owe, just sell it and take the loss. If you can't sell it, it's still your responsibility. Can we please stop this madness or has this country become just too selfish?
i don't think people intentionally plan not to pay the mortgage, if you lost your job and truly can't pay the mortgage just encouraging them to pay and not feed their kid is not the solution. and who do you think messed up the economy, its the politicians and bankers, they approved alot of people who are not qualified to buy a house, and don't forget its not the people faults when the freaking company outsource all the jobs. so do what you need to survive, the freaking bankers and stock holders are not getting hungry because you didn't pay mortgage. once we lost the middle class america we will be a third world country, we gonna end up crossing the border to mexico where they outsource our jobs.
I agree 100% with your response. A house is an investment. The banks can't guarantee that your house will go up in value. Perhaps if people lived within their means, there would not be so many foreclosures. Also, to encourage people to live "rent free" at the expense of the mortgage companies is immoral. Funny, how when prices of homes kept increasing, everyone was so fond of the banks for giving so many people the chance to own a home. Now when the artificial values of the homes have dropped, everyone says how wicked the banks are. The banks were forced to lend money to people who could not afford to pay back the loans and now the banks are being punished for giving high risk loans to those people.
Can you tell us more about this? I'd love to find out more details.
I have a friend who works for a bankruptcy lawyer. Most of her clients live in the house for free for a year and a half to 2 years before the house forecloses.
I definitely hope this isn't wisebread putting a stamp of approval on walking away... If you cant afford it don't buy it! It's BS that people like me live wayyyyy below our means, yet some people decide they want luxury, get free money from the government, and somehow get bailed out AND just recently, BoA was chopping principal off the top to help freeloaders out. But someone like me still gets stuck with the same APR and same monthly rates because im responsible...
Dont get me wrong, im all for helping people out who legitimately need help (lost job, health issues etc) but how do you not feel a sense of shame and disgust?
oh, and do you notice all the examples the Author gave were of people living above their means?? 5800 sqft, $800K homes... $5600/mo mortgages... c'mon people...
YAY!!!!!! u think that might be WHY freddie mac & fannie mae got into trouble in the 1st place???? u think that might have to do with WHY we're in THIS mess???? u think that might be WHY our Prez went after the BS & missed the boat w/the underlying problem?????? u think we're scrud?????? I DO (hands held highest)
I hear you, I feel the same way and I am a generous person who will help anyone but I see lots of people just taking advantage of the help thats out there. I pay my mortgage and sometimes struggle (I was out of work two months for a family members illness and my Bf got laid off, three months now) and I still try and do everything I can to keep up my payments. I see others driving BMW's and living in their homes for Free because they just stopped paying. Meanwhile myself who has no family money, government money etc, clip coupons and spend wisely to live a good life.
To commenter #1, if you read to the end of the article, you'll see that banks have also walked away from properties because they deemed them too costly. Since there are no debtor's prison anymore these people are just doing what they can get away with. When you say just sell it and take the loss, it is easier said than done when you owe a lot more than it is worth. Besides, when these people stop paying their mortgages and still live in it they are at least still taking care of the home. it is better than leaving the home empty and letting it be vandalized. When the banks ultimately take it over they sell it and take a loss anyway. Personally I think people shouldn't throw good money after bad, but I don't think people should break contracts either. However, if these folks really cannot pay for their mortgages anymore, then should they just leave their home immediately? What is the point in leaving the home open to vandals when they can just live in it for a little longer? I think my whole point in this article is that banks are very slow to foreclose now even if people stop paying, and those who really cannot pay shouldn't panic since they'll have time to prepare to vacate.
Yes, Xin, I see your point in noting that the foreclosure process is a long and slow machine. This is not just because of the banks, but also because foreclosure itself is a court procedure. The delays are built into the system on purpose to benefit the homeowner.
However, this is the second article that makes a point but abandons any responsibility to give actual facts. Yes, it takes a long time to foreclose, and if you are in this situation, the last thing you should do is panic and move out before the eviction notice arrives. You failed to note the effect on the credit of people who are in default. You also failed to note that most states are NOT non-recourse, meaning the mortgage debt is not going away.
At the risk of sounding like a broken record, I am attorney assisting homeowners in crisis. If you are in default, do not assume a foreclosure action has been filed if you haven't received a complaint. When you get the complaint, ANSWER IT. If you don't know how, just write a letter, denying everything.
Can WB please try writing an article on this subject with some facts that might actually help people, as opposed to reactionary conjecture?
After 30 years of frugal living, my husband and I built our modest " dream home on the land where we already live in a dilapidated farm house. Our payments were very affordable and we we're paying off a 30 year mortgage in 15 years. Then I got multiple myeloma ( terminal cancer), after a time was too sick too work. My first round of chemo cost $69,000.00 per months and latest almost two years. This summer I was in the hospital two weeks. Just my room was $78,000.00. Insurance pays 80% & we pay 20%. We are buried in debt, my income is gone. We are not irresponsible and people who think that everyone who is losing their home is doing so because of over indulgent spending is living in a very blessed place to be so naive. I have multiple friends who had six figure salaries who lost their jobs three years ago and still haven't found a job. This article show a some compassion to people who are going through a living he'll!
For what it's worth, I have written about the impact on people's credit scores when a foreclosure, short sale, or deed in lieu happens: http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-aff...
This article is purely a collection of individual stories, and not any general advice.
Sorry for the ignorance but can someone please explain to me how this hurts everyone? This is a sincere question. I don't see how John Doe defaulting on his mortgage affects me adversely.
Thanks!
It hurts because the banks have to increase mortgage rates (e.g. credit becomes more expensive) for those of us who would choose to use it responsibly. The responsible folks have actually be hurt twice by this. Those of us who knew we couldn't afford a home for the last few years before the crash saw people who couldn't afford those homes drive the prices to astronomical levels. When credit was cheap and these exotic loans existed, it didn't matter if you over bid a $100 or $200 thousand because you were just going to refi using the equity later.
Now, instead of letting the houses return to a reasonable level so those of us who are responsible and have been saving for a down payment for 6 years can buy at "real" prices, the gov't and the banks are trying to prop home prices up and keep people in houses they "own", even though they actually own no equity in those houses.
are paying for the bailouts...........
Foreclosures bring down the value of the houses in the area they are in. For example my house has a few foreclosures nearby so they are being sold very cheap and under value so if I were to go sell my house its value would be a lot lower then it would normally be because of the median home sales in my area. Hope this makes sense maybe there is a real estate broker among us :-)
since these free loaders don't pay, our taxes on our properties have gone up and up. I can not stand these people. why do I have to pay. They knew what they were doing getting in their houses. I have a small house and not in a great area, but that is what I can afford. don't live more than your means.
I know someone who bought a very modest home 2 years ago. He is on permanent disability. He was single at the time of the loan, but was engaged and would be married about 2 months later. He had to sign documents at closing stating that he was aware that his mortgage payment would be more than 30% of his income. So he signed it knowing their incomes would be combined. No problem. The payments were actually more than 50% of his income. Well, he and his wife got separated last November, she moved out. They divorced in Feb. He can no longer afford the house. He put the house up for sale once she moved out. It was listed at $85,000 to begin with. No one interested. He finally contacted his mortgage co. after his savings was depleted to make payments, and they told him to not make payments for 3 months and then they could help. They want him to do a short sale. So, the price on the house is now $65,000 - a $20,000 drop in a few short months. There has been some interest, so maybe he can sell it. But it won't pay off his loan. Hopefully he won't get a deficiency judgement against him. What is someone is position supposed to do? He is living in the house and saving the mortgage payments so he can rent a place once the house sells. It could take a long time.
In addition to what Guest #8 noted, foreclosures also affect neighboring property values. The lenders actually factor in foreclosure stigma when evaluating mortgage modifications. What do you think would happen to the value of your home if it was surrounded by boarded-up, foreclosed homes?
The best advice for your friend is to seek out assistance from a local Legal Aid for more state-specific advice. Many states are enacting special mortgage crisis legislation that mandates things like mediation between the homeowner and the bank and also providing funds to legal agencies to assist.
A short sale may be the best solution, but he should still be careful about negotiating a good deal with the bank regarding the deficiency. The lender can forgive the deficiency, but he should still be cautious about how the bank will report this to the IRS; if this isn't addressed, they can and will report it as income.
He is doing the absolute right thing by staying put and banking those payments for now.
forgives $250000 for single, $500000 for couple...a lawyer may or maynot help w/this b/c some are know as "whale..., shysters"...he'll take your cash but a lawyer even Real Estate lawyers, don't necessarily know the laws, except to their advntage.
"It hurts because the banks have to increase mortgage rates (e.g. credit becomes more expensive) for those of us who would choose to use it responsibly. The responsible folks have actually be hurt twice by this."
#8, I'm not sure I understand this. Why would banks increase interest rates for you? Wouldn't they only increase interest rates for the irresponsible since their ability to pay has no effect on yours?
"Now, instead of letting the houses return to a reasonable level so those of us who are responsible and have been saving for a down payment for 6 years can buy at "real" prices, the gov't and the banks are trying to prop home prices up and keep people in houses they "own", even though they actually own no equity in those houses."
Apologies, but you're going to have to excuse my ignorance once again. It would seem to me that allowing people to default would be a good thing here, no? If we want affordable houses then I would assume that to mean lower prices; and one way to get lower prices would be to allow foreclosures to happen. Hmm, I must be missing something here because it would also appear to be the case that foreclosures are a good way to return housing back to realistic levels.
"In addition to what Guest #8 noted, foreclosures also affect neighboring property values. The lenders actually factor in foreclosure stigma when evaluating mortgage modifications. What do you think would happen to the value of your home if it was surrounded by boarded-up, foreclosed homes?"
#10, yeah, that would seem to be a problem. I guess I would have to ask why a house would be allowed to be surrounded by boarded up homes. Surely, there must be someone willing to live in those homes. Why can't the banks sell the homes at auction?
Thanks in advance for the response. I'm new to the United States and I'm learning a lot!
I agree with JT here. The faster these homes actually foreclose the faster the prices will go down. Those who are depleting their savings to stay in the homes they know they will ultimately lose are not helping themselves or the general market. Again, I think it's good that these homeowners are actually staying even if they cannot afford the mortgage anymore because they are hopefully keeping the properties in livable condition when it comes time to sell.
Suppose one business is buying a factory from another. It's supposed to make payments for 30 years, but the contract provides that it can quit making payments at any time if it gives the factory back.
Now suppose business conditions change, such that it makes business sense to give the factory back and quit making payments. Do you think it's not going to do so? If it's following the terms of the contract, I'd say it would be both legal and ethical. (In fact, it'd probably be a lapse of its fiduciary duty to its shareholders not to do so.)
Under the law in many states, that's what a mortgage amounts to: Pay for 30 years, or give the house to the bank.
What's really interesting to me is why people think it's different when it's a person sticking to the terms of the contract, versus when it's a business doing so. I wrote a post about it a while back called Don't Treat Businesses Like People.
very well said, Phillip. This is a great example of what people are missing. Banks walk away from loans that "aren't good business sense"....why should the average citizen be different. we shouldn't bankrupt ourselves to preserve the banks profit margin. When they signed the mortgage, they also knew there was a risk involved. i wish everyone would stop thinking the banks are innocent, do no wrong institutions.
"I guess I would have to ask why a house would be allowed to be surrounded by boarded up homes."
"I agree with JT here. The faster these homes actually foreclose the faster the prices will go down. "
First off, the answer to question number one is the subject of the article: for various reasons, some related to lender bureaucracy, some to the legal requirements of foreclosure, the process is lengthy. Even after a home is foreclosed, the lender then has to actually sell it. Sometimes this happens at an auction - which must be scheduled, publicized, and then hopefully have people attend with money. Many people are still not in the position to purchase a home, even at a foreclosure discount. I am envious of you, JT, if you live in an area of the country where you don't drive down the street and see these homes. This is a real issue - so real that as I mentioned, the lenders have an actual mathematical formula to determine the decrease in value of a home that has "foreclosure stigma."
Xin, you can't have it both ways. Either it takes a long time to foreclose and people should stay in their homes until evicted or we should speed up foreclosures so houses can pass on to permanent owners at lower prices. Which is it?
"#8, I'm not sure I understand this. Why would banks increase interest rates for you? Wouldn't they only increase interest rates for the irresponsible since their ability to pay has no effect on yours?"
#8 here, I think you are talking about loans already in existence. I was speaking about NEW loans. New loans will be hurt by foreclosures because, assuming the house is underwater, the bank will not be able to recoup the loan they made. This means in order to meet their financial targets (margin specifically), they will need to collect more $$$ from new loans. Think of banking as a risk pool, as some in the pool start to cost the banks money, they have to increase rates to balance the level of the pool.
You are right about your second point, I was contradicting myself. Foreclosures are good for those of us who don't have loans and are hoping prices will return to more normal levels (they have in some areas, but here in the Bay Area CA they are still high IMHO). I meant that the bank forgiveness and gov't assistance that is going on is propping up prices. I understand that some people met hardships, but a lot of folks just bought houses they couldn't afford and bid up prices, assuming that the value of the home would go up and they could use that equity later to re-fi.
do not know WHO the perpetrators are, the banks hold the $$$, have been bailed out by US (the taxpayers), but they're NOT going to share the wealth to get back in the same condition as when the bottom fell our of the market, the bailouts were staged to strengthen the banks' loan-making attitude, but new laws put in about those procedures have frightened the banks from making those loans to (U GUESSED IT) US, the taxpayers....it's a vicious cycle
Philip, the problem is that many states are NOT non-recourse, meaning you cannot simply hand the house (or business) back.
If you would like to provide a complete list of which states are and are not non-recourse, then we can have a meaningful discussion. To continue to make this vague statement that "some," "many" or "most" are just adds to the confusion and misinformation.
Q, you said, "Xin, you can't have it both ways. Either it takes a long time to foreclose and people should stay in their homes until evicted or we should speed up foreclosures so houses can pass on to permanent owners at lower prices. Which is it?"
I'm not sure what you mean by having it both ways. Right now the fact is that it takes a very long time for banks to foreclose and it is taking even longer than normal because of the various prevention efforts. I am saying that if people were realistic about their inability to pay and stopped paying sooner and banks foreclosed faster then prices would come down faster. I am not supporting the current policies of delaying foreclosure and non-stop government interventions. What about that is "have it both ways"?
Xin, your article features several stories of people who successfully remained in their homes for extended periods of time, in default and not paying their mortgages. You presented no examples of the contrary position, and then posit "Are you more likely to walk away from your underwater mortgage knowing that you could possibly live in the home for another two years?"
Now you are suggesting you want banks to foreclose faster, which would subvert the entire point of your article. Or perhaps it's just that the point of your article is a bit fuzzy. I certainly took it as an endorsement of taking advantage of the lengthy foreclosure process, seeing as you presented no downside.
Your finances are a result of either conditions or choices.
A condition would be losing your job, becoming disabled, etc. If the condition will be temporary then a loan modification might work. Otherwise, sell the house, take the loss and move on. Or contact the lender and offer to give them a deed in lieu of foreclosure.
Most of the examples in this article are the result of bad choices. Too much debt, lack of fiscal discipline, whatever you want to call it. These same people now want to walk away from their responsibility but not before getting 12-18 months of free rent out of the deal.
When we condone strategic defaults everyone loses. Credit will be harder to get and property values will remain depressed which means those of us who actually live up to our obligations end up paying the price.
Be a responsible citizen-live up to your agreements or move out and move on.
Do they keep paying the property taxes?
While I can't feel too bad for huge banks who've taken us all for a ride I have some feeling that not paying your property taxes is putting your neighbors and your kids in a bind. Most of us are getting some services from our local governments that property taxes are funding.
I didn't take this as an endorsement or encouragement to stop paying the mortgage, although I was a bit confused at first about the title as I did stop paying my mortgage, after I finished paying my loan in full last year.
Staying in a foreclosed home is an interesting idea, and sadly, something that my grandparents ended up doing during the Great Depression. The bank foreclosed but since no one could afford to buy the house, they stayed -- I don't know all the details but presumably they rented and made monthly payments by taking in boarders. They didn't have medical problems then and both (grandfather and grandmother) worked in outside jobs.
..and here I am in a neighborhood where houses are selling for up to $50,000 less than what I paid 5 years ago.
I am blessed to be able to pay, but the banks and their games leading up to this financial mess make me want to stop paying sometimes.
I personally know someone who stayed in the foreclosed home for 2 1/2 years before leaving, he finally found another job in a different area. The house was in the girlfriends name, she passed away, and he decided to stay until someone told him to leave. They NEVER did. He just kept paying the utilities, never got a notice, no one ever came to the door. We thought it may be because the house is in Michigan, the mortgage was held by a bank in California. But if he had left, the house would be trashed. You can't leave an empty house in Michigan with no heat, pipes burst, plaster cracks etc. etc. It did sit empty for almost a year, and then I saw someone was living there again. I wonder if the bank knew?
from what I've seen locally, it doesn't help the neighborhood to have people squatting in their homes. In our neighborhood, those people who have stopped paying their mortgages have also stopped mowing their yard, stopped taking out their trash, leave their crap on the yard, and have just basically let the house go to waste.
I guess if you aren't paying for the house, then you probably aren't going to want to pay to keep it up. If I were in their shoes, I would probably act the same way, and live there as long as the bank allowed.
However, I would rather see my home's value go down because neighboring houses have been foreclosed on. It's still going to be easier to sell mine when ready with that situation than to try and sell my house with trashed houses between me and my potential buyers.
Who cares what she's endorsing? this is good information to keep somebody from becoming homeless. That's important. you absolutely have to hustle where you can get it. To play by an honest mans' rules with a con-artist is idiotic. They're the one's throwing YOU out- let them do the work to ruin your plans.
I don't know, the "blame the lender" attitude rubs me the wrong way . . . particularly in the story of Shawn Aaron.
You're right Julie, I should've titled it "How Long Can You Stay in Your Home After You Default on the Mortgage". :)
...or lack thereof. What I read in Paul Michael's article and in the examples you gave, is the commonality of "No character".
With a few exceptions, these are "all about me" people. It disgusts this reader.
You are right about your second point, I was contradicting myself. Foreclosures are good for those of us who don't have loans and are hoping prices will return to more normal levels.
Regards,
Scott Spinella
So we're praising losers with no conscience who don't make good on their debts? Wow.
I'm definitely not "praising losers", but just showing that some of those who defaulted know exactly what the rules are. You can call them "losers", but really if they did not put down much of a downpayment then they did not lose much did they? Some of them were paying an expensive mortgage for a while, but if you factor in the free months of housing these folks got then the average "rent" they paid might not even be that high. I am not endorsing this, but I'm just saying that this is how it is now.
"Xin, your article features several stories of people who successfully remained in their homes for extended periods of time, in default and not paying their mortgages. You presented no examples of the contrary position, and then posit "Are you more likely to walk away from your underwater mortgage knowing that you could possibly live in the home for another two years?"
Now you are suggesting you want banks to foreclose faster, which would subvert the entire point of your article. Or perhaps it's just that the point of your article is a bit fuzzy. I certainly took it as an endorsement of taking advantage of the lengthy foreclosure process, seeing as you presented no downside."
#19, forgive me if I'm wrong but I think Xin is talking about two different things here. When she's talking about the fact that people are staying in their homes for 18 months after defaulting, she is referring to something that "is". However, when she's suggesting that the foreclosure process should be faster and more efficient, she is referring to something that ought to be.
Establishing a difference between the two is crucial as one is a reality of our world while the other is an idealistic scenario.
We purchased a home well within our means. We added square footage by insulating the back porch and turning it into a den. Because of foreclosures and short sales in our neighborhood, our house is now worth 20,000 less than the purchase price of 70,000. Most of the foreclosures were from job loss and so on. We are in a very small town and in the "poorer" section of town as well.
These questions are ones that many people are asking themselves, but are afraid to ask anyone. As a recent widow, I know we will have to default if I can't sell. With four small children, I am wondering how long we can stay in our home. My objective isnt to take advantage of the bank or its processes. It is reasonable question for such a serious life change.
Foreclosure makes credit more expensive? Then save up and pay cash. Stop blaming others and trying to make them homeless. If you have perfect credit, you will get good rates. End of story. Home loan interest rates used to be 8-12% some years ago.
And for people staying in homes whose property values dropped, low property values = lower taxes. So look on the bright side.
Yup, when my parents bought in the late 90s mortgage interest rates of 7% was considered really great. Right now the mortgage rates are still at historical lows, and that is mostly due to the fact that the government is still trying to prop up the market. In a way, the wave of foreclosures right now is actually keeping the interest rates down because the government is just trying harder to soften the blow of these foreclosures.
I personally know someone who stopped paying their mortgage in November 2008 and is still living there "free". The foreclosure process was started but due to legal "mediation" in which the bank didn't show up, the process basically stopped. I'm curious how long they are going to be able to stay there before getting kicked out.
A good informative stuff and relevant in this turbulent period.People should know about the foreclosure rules and the tenure of stay after stopping paying mortgage which I am sure most people are confused about.
I believe that people should live within their means. I understand that the economy is in a shambles but people need to adjust with the signs of the economic times. However i didn't know that homeowners can stay in their for that long of a period of time. I think thats a humane gesture on the lending companies to not just put people on the street.
Tune in next week for Wisebread's latest post, "How Long Can A Father Continue Molesting His Children Once His Ex-Wife Brings Her Suspicions To The Attention Of The Police?" Featuring real-life interviews with pedophiles who indulged themselves for months before Child Protective Services got its paperwork in order.
(At least the kids would have a roof over their heads and food in their stomachs, right? Better that than they be out on the streets.)
I trust that the point I'm making here is obvious.
I have a question. I have a family member who bought a home and since then has become disabled. Can he be legally kicked out of his home? He is struggling finiancially. What is the best advice you have for him?
I think its freaking ridiculous! I have a court order for my ex to sell our house (court order 2008) and my ex is STILL living there - and has not made one single payment since July 2008, so he has lived there FOR FREE for over TWO years!! WTF ? Me and the kids are living in a rental house - which we pay rent, and I feel it is so unfair that people can live like that, or maybe I am just angry that I could never be a leach like that. I am unemployed, and do not receive child support BUT - I always pay my rent.
I understand the banks are overwhelmed with all this foreclosure crap but really? you can go almost 3 years without a payment and nothing happens? If I miss my payment by the 3rd day of the month, you can bet your life that I will have a notice taped to my door... Some people -
My wife and I don't think we are going to completely walk away, but was thinking of donig the following. Make long story short, both of us lost jobs, finally found new jobs, but with much lower pay. In order to get some higher interested (29.99%) credit cards paid off I was thinking of skipping a mortage payment. My plan is to never get behind more than 2 payments. Was thinking about doing this for about 3-6 months until I have 2 of the (29.99%) cc paid off. Do you think I have a pretty good chance to stay in my house as long as I never get more than 2 months behind? I live in CO.
C'mon guy...you have no clue what you are talking about. It doesn’t hurt anyone. Banks make money on their foreclosed homes...it a business for them. And it is built in to your mortgage that foreclosure may happen. It’s like that is stores...they calculate how much merchandise will be stolen and they put it in their pricing so no one loses. Mortgage companies take out insurance on your home to save their butts so when you default then they collect on the insurance and the sheriff sale. And why can big corporations do this and it’s a savvy financial decision and when the consumer does it we are deadbeats. Don’t judge cus you may be in this situation someday. Get educated before you write anything down or give advice and do the research...people that are walking away lost their jobs...have to relocate or the mortgage company escrowed their taxes 2 ½ year and made the mortgage too expensive cus they did a loan mod and got turned down. There are a lot of reasons but most are legit and mortgage companies don’t want to help at all. Also why do you think it is moral for the mortage companie to give out morgages that reip off people like no doc with all interest and arms that most peiple will have moprtgages twice tha amout in a few year. Mortgage have riped off so many people and they seem to have ethics..I think not. And when you call the reps at a mortrage company...they dont care and are rude to you...PLEASE!!! I agree with anyone who has been through hell to walk away and anyway you cant get blood from a stone so where are these people going to get the money to recoop. They have to get from underneath this nightmare and start new.
we have not paid since Dec. 2010 and we are still here!!
Cautionary Tale!
Summary: If your situation through sickness, job loss/downsize or health issue has you in an upside down mortgage; do the math and stop paying your mortgage. Screw the banks! You must save yourself and your loved ones. I got less calls after stopping. Never once did it become an issue with the bank. The window of opportunity is closing on doing this tax free and with the shortage forgiven. The realtor was of no help(wanted commission as fast as possible and HAFA made for delays. The short sale lawyer was an obstacle to doing it my way. Research on the internet till your fingers bleed. You must price your house as an huge bargain, without the right price you won'tget an offer. Without someone willing to jump through the hoops as a buyer, you will not get out of the house and eventually they will foreclose; although it was never intitated in the 15 months I did not pay my mortgate. My house sold for 56% of what I agreed to pay for it and closing costs are not include in that figure (bank pays for all that in a short sale!). Never worry about how cheap the house is selling for, just get rid of it.
I have lived this nightmare and have come out the other side. The unknown was the hardest part. Yes, it was a mistake to buy the house to begin with. Once you make a mistake, life goes on and I had to unwind it. I did not buy the place with the thought of not paying for it. I did not realize the property tax would be $14K a year. I did not know I would come home from work one day and find out that my wife had grabbed a few things and left; leaving me to solve the problems of a broken marriage and a house I couldn't afford on my own. I cashed in all my retirement accounts to keep making the payments. I slashed every cost. I prayed. I cried. I sold the house via short sale in July 2011 after 3 1/2 years on the market and I don't know how many showings. I stopped paying on the mortgages in May 2010. I applied for the HAFA process and was approved so that both mortgages are gone and I am not required to repay the shortfall or pay tax on it. I came out smelling like a rose. I rent now. My retirement will be delayed and very simple. My credit is not that bad, about 650. I have my health. To judge people and throw out mean comments about how evil a person is who is not paying their mortgage is an odd reaction. I used my brain and the tools that were out there to solve this mess. I ask you this, if you were in the same boat, what would you do? The mistakes I made were this: 1. I bought a house that couldn't be supported by only one income. 2. I cashed my retirement in to pay the mortgage. 3. I accepted money from my very nice girlfriend to help pay for the mortgage on an unsaveable deal. 4. I did not stop paying the mortgage earlier.
Bottom line everyone. Banks are businesses and have business mentality. We as individuals should have the same mindset. If the banks are willing to make a business investment and file for bankruptcy and get bailed out, we need to follow in their footsteps. A house is a business transaction. It it falls short of profit or expectations, cut it loose as soon as possible! Yes credit is important, but by now you have everything you need: car, phone, furniture, and other such material things. Quit paying, save up for first, last security and get a CHEAP suitable rental property. Save up, Pay cash on everything. Note- You should ALWAYS have a safety net! (min 5,000 dollars) for any type of emergency. I am still living in my house, low payments and always maintain upkeep. My suggestion are for individuals whose payments far exceed the value of the house and are falling short of their important obligations: food, electricity and most importantly your kids! Use common sense.
My Friend has not paid his mortgage in over (3) years and he still occupies his home. It is very discouraging for all of us who do uphold their obligations.
His lender is Bank of America, he lives in NJ; specifically Hamilton Township
Me and my wife filed chapter 7 bankruptcy 3 years ago and was discharged, we are going through a divorce. I would like to know how long I could stay in the house if I stop paying on it. the house is still considered in the bankruptcy so it will not hurt me (right?) the credit bureaus do not show it on my credit, and when can i repurchase another home? If I try to purchase another home now will I be able to if the BK has been discharged for 3 years now? I could use the money I am paying on my house now to pay off other bills.