It’s amazing to me that people are so shocked when someone says they are no longer going to make payments on their home that has a underwater mortgage. Look at what they are saying, they simply see that their payments are going towards a dead asset or in this case their mortgage. They just don’t see the point as they are the glass half empty type of people. You know these folks everything is a negative thing ahead of the potential positive outcome.
It becomes an ethical question at this point, make your house payments or stop paying and walk away.
If you have been here before I have addressed the common response of walking away from your home as something that should never happen. I truly believe that you need to fight to find solutions before resorting to the easiest course of action. It’s just easy to walk away and it’s HARD to stay in and fight with your bank or lender to make things work “The Right Way”
“The Right Way” is fighting for a desired outcome and not taking the path well traveled.
1. Attempt a loan modification – This is difficult to accomplish and will often require duplicate work on your end just to have them look at your paperwork.
2. Attempt a Short Sale – this is selling your home for less than the loan amount. It is very common these day and there are some very good Short Sales Agents out there so just go find one you like and make it work.
3. Try a Short Refinance – This is not easy but it is possible to refinance your home for less than you owe. You need to demonstrate a hardship and if done correctly you can get your balance reduced and you remain in your home.
4. Sell and rent back – this is more complicated but can be done if you absolutely want to stay in the home you currently own. You also might get lucky and be able to buy the house back for less shortly after you short sell it to the investor.
Many times people don’t work through all their options because it is just TOO HARD! There is a whole lot of emotional stress when it comes to dealing with your mortgage. I guess anytime you deal with finances it seems to be difficult. Just know you have options and that figuring out those options is not that difficult.