Walking away from your house

[memoriesbymichelle]

OK so I have a friend....Saw her last night.....she informed me that her and her husband are gonna just walk away from their house. They tried to do a re-mod loan and were denied and her husband said the house is a ball and chain around his neck. They refinanced when times were good a couple of years ago, and they are about 40,000 upside down (I am too). They are both Christians....my BIL did the same thing, also a Christian. He did it cuz he couldn't afford it since his divorce and he's upside down as well so he just walked. IDK I have mixed feelings about this. I mean I am drowning in debt, but it's debt I created and even though I go more in the hole each month, I am determined to stay the course and pay off my debts. On the other hand, for my friend and BIL, I completely understand their side as well, I just don't want to do that myself, but I have mixed feelings about whether it is right or not. What do you think?

 

[Aimiel]

I don't have a problem with walking away from the loan. If you're upside-down, it's due to the false pricing you bought the house under and the high interest rate to boot. We recently re-financed our loan, and got a 2% mortgage. Thank God for that. Our payment went from almost $2,000 to under $800. We're staying, but I don't see anything wrong in walking away, if the loan is killing your ability to live comfortably.

 

[dayhiker]

I'm like you MbM, I'd not like to walk, but be responsible and pay my commitments.
I don't know all the details of how it would work out. I think its about 7 yrs to rebuild ones credit. So even if one gets out from under the house, there is still the commitment to rebuild ones credit I'd think. My plan was always to buy a house that didn't strap me .. use up all my extra cash. But unemployment can put one in the hurt financially very quickly even with some savings and low mortgage payments. But if I had to walk to continue to life, guess I would.

I guess they looked into the rent costs of living before making that choice.

dayhiker

 

[memoriesbymichelle]

I'm like you MbM, I'd not like to walk, but be responsible and pay my commitments.
I don't know all the details of how it would work out. I think its about 7 yrs to rebuild ones credit. So even if one gets out from under the house, there is still the commitment to rebuild ones credit I'd think. My plan was always to buy a house that didn't strap me .. use up all my extra cash. But unemployment can put one in the hurt financially very quickly even with some savings and low mortgage payments. But if I had to walk to continue to life, guess I would.

I guess they looked into the rent costs of living before making that choice.

dayhiker

dayhiker, do you know anything about Deed in leiu of foreclosures? I told my friend that maybe they could do that. IDK if the lender would go for it, but it's worth a try.

Aimiel, HOW did you do that? was it a re-mod? she tried to do that but was denied.

 

[Aimiel]

We had a VERY helpful lender (CitiBank) who originally wrote us a balloon interest loan that was killing us. We were three payments behind, and they found some US Government program that we were the first to qualify for. It is SO nice to be able to afford our payment and our other debts, without frustration. God has been VERY good to us, and we have SO much to be thankful to Him for.

 

[memoriesbymichelle]

We had a VERY helpful lender (CitiBank) who originally wrote us a balloon interest loan that was killing us. We were three payments behind, and they found some US Government program that we were the first to qualify for. It is SO nice to be able to afford our payment and our other debts, without frustration. God has been VERY good to us, and we have SO much to be thankful to Him for.

Hmmmm my friend's loan is with Citibank and she said they are the worst at being helpful, go figure.

 

[Aimiel]

Yes, I would have to agree... up to a point. You simply don't know my wife. She's very persistent, persuasive and stays in prayer until she gets what she wants, or finds out the reason why not or both.

 

[dayhiker]

Nope, MbM ... I've not heard of Deed in leiu of foreclosures.

Persistance sure does go a log ways when dealing with a bureaucracy. Also I'm sure the attitude of the local branch office makes a big difference.

 

[memoriesbymichelle]

Yes, I would have to agree... up to a point. You simply don't know my wife. She's very persistent, persuasive and stays in prayer until she gets what she wants, or finds out the reason why not or both.

Well Praise God for your Proverbs 31 woman!!!
A woman at my bible study has been working on her re-mod for 20 months and hasn't paid a mortgage payment in 20 months but just yesterday FINALLY got her loan. 40 year loan starts at 2% and goes up to 8% I think.
The friend that is walking that tried doing a re-mod said they lowered her payments for 3 months only about 300.00 (her mortgage was 2,000 also) and then every month when they would pay the re-mod figure the bank would call and say they didn't make their payment. Even had one lady come to the door one month!!! Then at the end of the 3 month trial or whatever, they said they DIDN'T qualify! But they also were NOT behind in their mortgage when they were doing the re-mod and the bible study lady said that was probably why, but.....I think they are just gonna walk so it's all mute. She has the support of her family too and they are all christians too so .....Glad YOU got your re-mod though. I wish I could get an unsecured loan to pay off my credit cards cuz I already have a second on my house but......

 

[Aimiel]

My wife made friends with all four of the people at one branch of CitiBank's loan offices, and they gave her all kinds of advice, one of which was to get counselling. We did, and they negotiated a lower interest rate on all of our accounts, and we're paying them each month via automatic withdraws, and will have the whole of them paid off in a little bit less than two years. The lowered interest rate on our mortgage is what we rejoiced over. It's locked in, for the life of the loan, and we're very happy about that.

 

[LisaMC-D]

I am glad you all have shared. I will pray. As with so many people, money is tight. However, I have rarely heard positive stories, so thanks for that.

This has comforted me many times:
Stand firm against him (the enemy) and be strong in your faith. Remember that your Christian brothers and sisters all over the world are going through the same sufferings you are. 1 Peter 5:9

Somewhere someone is lifting you up in prayer!

 

[Amanafterherheart]

Mort companies are "walking" from homeowners. I know its a wrong attitude but they reap what they sow.

 

[memoriesbymichelle]

Mort companies are "walking" from homeowners. I know its a wrong attitude but they reap what they sow.

It's so true though. My girlfriend is with Citi Mortgage and they don't even care that they are forclosing. There was no offer to work with them....zip...nothing....nada....it was just "Oh OK well make a note of that". I've heard of other people that Citi DID work very well with, so I guess it depends on "who" you get within these companies, but yeah, I agree with you about reaping and sowing. They got bailed out, yet THEY will bail out no one. Kind of reminds me about the story in the Bible where the King pardoned a man for a gazillion dollars that he would never be able to repay, and then later that same day the guy that got pardoned wanted someone thrown in jail for owing HIM the equivalent of about 20 bucks. Plus if they can't get your house they'll jack with your infamous credit score by lowering all your card rates to just a tad more than you owe making it seem like YOU maxed out all your cards when it was THEM that made the change but YOUR score is affected. Yeah that's fair, right? Plus we aren't even "allowed" to know the super secret double probation formula for figuring out the STUPID credit scores in the first place. Whatever. I'm just gonna keep digging my way out of the hole I'm in, with God's help and try to never get in debt again, so I won't have to care about the bank OR my stupid credit score.