Poll: Would You Ever Walk Away From Your Mortgage?
In order to qualify for federal loan modification assistance, your mortgage balance can be no larger than 105% of the appraised value of your home. So what if your house’s value dropped so much that you owe more than that? (This is referred to as being “underwater”.)
One option that many people are considering is to simply stop paying your mortgage, walk away, and mail your lender the keys. This is especially true in the 27 states in the US have “non-recourse” mortgages, where the lenders can’t even try to seek from you the difference between what you owed and what they auctioned your house for.
Some people view paying your a mortgage as a moral and/or ethical obligation. Others view it simply as a legal contract, where you agreed to borrow money with your house as collateral. The lender takes on the risk of you walking away, in exchange for a certain interest rate. You, on the other hand, must deal with the consequences of a damaged credit history.
For the purposes of this poll, “walking away” means doing so voluntarily before circumstances would force you into foreclosure. What do you think?
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I won’t take either way stand for now, but will post my own thoughts tomorrow. Elaborate on your choice in the comments below!
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Filed under: Finance, Money Saving Ideas
