X

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)
Submitting your question...

Question received! Check back later to see if your
question gets published.

Q: We just sold our house. When do we have to pay the IRS?
JAN 20, 2021
A:

Capital gains taxes as they apply to your principal residence can be found in IRS Publication 523.

Read More
Q: How do I find out who owns my mortgage?
MAR 15, 2021
A:

The owner of the loan is most often the "investor" -- the entity who put up the actual funds to make your mortgage happen.

Read More
Q: Does mortgage insurance assist the survivors of a deceased policy holder?
JAN 20, 2021
A:

Credit life insurance is sold to homeowners as a means to pay off the mortgage in the event of the death of the homeowner.

Read More
Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen