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What are mortgage rates likely to do as we close out 2023 and start 2024? Check out our latest Two-Month Mortgage Rate Forecast.

What are mortgage rates likely to do as we close out 2023 and start 2024? Check out our latest Two-Month Mortgage Rate Forecast.

Should I walk away from this mortgage?

Q: I owe $200,000 on 1 bedroom condo now worth about $85,000. Loan was modified to lower my monthly payment, but must be paid at sale. I'm retired & would like to move to Oregon - shall I walk away & let it foreclose?

A: There can be pros and cons to walking away from your mortgage and you should understand them fully before you consider doing this. In general, you shouldn't walk away unless you want to ruin your credit further. Rather, you should talk to your mortgage lender about a short-sale or deed-in-lieu transaction. In a short sale, the lender will agree to sell the home for less than the amount of the mortgage; generally, you'll remain in the property while it is on the market. An alternate method to walking away would be to inquire about a deed-in-lieu transaction, where you volunteer the title of the property to the lender so they don't have to go through the expensive foreclosure process to legally obtain the title. Both methods can have benefits and drawbacks, and you should have a lawyer to advise you and help you negotiate any contracts so as to minimize any damage to your credit and promote the best outcome for you.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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This question used to have a simple answer, since there was a "bright line" definition -- the conforming loan limit....

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Simply put, a "conforming" mortgage "conforms" to a set of standards so that the loan can be eligible to be sold to Fannie Mae or Freddie Mac.

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Q: Can you recommend a company specializing in mortgage modifications?
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A:

No, we're not in a position to do that, but you should be careful when reviewing offers that haven't come from your mortgage servicer.

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