Can I walk away from my mortgage and what would happen?

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Can I walk away from my mortgage and what would happen?

I own more than my house is worth and taxes are killing me. I no longer can afford it.

Asked on November 17, 2011 under Real Estate Law, New York

Answers:

Michael D. Siegel / Siegel & Siegel, P.C.

Answered 10 years ago | Contributor

I strongly disagree with the prior answer.  You have many options, including a short sale and a deed in lieu of foreclosure.  You can also file bankruptcy.  What you should do is never just "walk away".  You should structure a deal so you are not liable for additional damages and know when you have to move out, and where you are going to go.  Talk to a lawyer about your options, some of which require a small investment of time and money.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) The home will be foreclosed.

2) You will have a default and foreclosure on your credit report; while credit rating agencies are cagey about releasing their formulas, conventional wisdom is this will hurt your credit almost as much as a bankruptcy would.

3) In the majority of states, if after foreclosure, the home is sold and brings in less than the remaining principal balance of the loan, the bank or other lender could sue you for any unpaid amounts (called seekking a "deficiency judgment"). If you write back in with the state the property is located in, we can tell you whether your state permits this.


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