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08-28-2008, 01:39 PM | #1 |
Donating YT 500 Club Member Join Date: Jun 2005 Location: Bay Area, CA
Posts: 1,086
| Need advice: Walking away from your mortgage My friend walked away from her mortgage in November, its nearly 10 months and she has not had any repercussions from doing so. I'm just curious what may happen to her, credit wise. She tells me her credit is fine right now and actually just opened a couple credit cards with no issues. Prior to her walking away, she had asked her bank if they can help her and her bank turned her away stating that they can't do anything. Now she tells me that they are calling her and stating that they are willing to work with her and asked her to give them like her budget details to determine her affordability. She turned them down and told them flat out that she tried working with them before it happened but they didn't do anything and now its too late. She just doesn't care anymore. But of course, she's my friend and I'm always looking out for her, been that way since the 6th grade. Anyhoot, I'm just wondering if anyone here had the same experience, or know of anyone that went through this. Or a professional that handles these kinds of situations and can give any advice? What are the repercussions of doing this or what steps she should have taken instead of just walking away? Thanks! |
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08-28-2008, 01:58 PM | #2 |
I ♥ Joey & Ralphie! Donating Member | Her credit may look all right now, but it will probably be difficult to get a big loan, for a house or car in the future, and if she does she will have to pay premium interest rates. Banks have to make up for these losses by increasing fees for everyone, so people who "walk away" from loans hurt all of us. The bank won't lose money. She would be wise to work with the bank if they are now willing to do this, and she probably should go easy charging things because it doesn't sound like she's very good with money. Is she living in the house, or did she walk away from that too?
__________________ NancyJoey Proud members of the CrAzYcLuB and YAP! ** Just Say No to Puppymills – Join YAP! Yorkshire Terrier Club of America – Breeder Referrals |
08-28-2008, 02:08 PM | #3 |
Luv my Angel, too! Donating Member Join Date: Apr 2006 Location: USA
Posts: 9,333
| Is your friend in California as well? It is my understanding that almost everyone in CA does interest only loans as that is the only way to be able to afford the very high priced housing. I believe it is slightly different walking away from an interest only mortage than a traditional mortgage, but I'm not quite sure how.
__________________ Sissy & Angel |
08-28-2008, 02:30 PM | #4 |
Donating YT 500 Club Member Join Date: Jun 2005 Location: Bay Area, CA
Posts: 1,086
| Yes, she's in the bay area. She's actually very good with money but the problem is that she doesn't make that much of it. Very responsible person and pays cash with everything. I was actually the one that coerced her to open a credit card when she was 18 so she can have some form of credit. She needs tons of advice when it comes to the business world because she doesn't know much. Her cousin was the realtor that helped her get the house, which I told her from the get go that it was a bad idea. But she didn't listen to my advice. She was paying $4000 a month in mortgage, including escrow (this is not a mansion, its a very small suburban house). She makes like $2000-3000 a month so her boyfriend and his mother was helping her pay it. It got too much for her to handle because she also has 3 kids. She's not living in the house anymore, the house has been empty for 10 months. I've just learned that if walking away from your mortgage, it would take like 12-14 months for the foreclosure process to start. I'm still trying to learn more about the foreclosure process. Last edited by wookie; 08-28-2008 at 02:32 PM. |
08-28-2008, 02:35 PM | #5 |
YT 1000 Club Member Join Date: Nov 2005 Location: Tucson, Arizona
Posts: 1,840
| NPR had a good story on this. Check it out. Why Not Just Walk Away from a Home? : NPR It can actually be OK to walk away from your mortgage. |
08-28-2008, 02:52 PM | #6 | |
Donating YT 500 Club Member Join Date: Jun 2005 Location: Bay Area, CA
Posts: 1,086
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