I'm considering walking away and need advice

[Confused33]

I was laid of yesterday and have had my house FSBO or FLBO for about a week now. Gotten some hits but nothing really serious. EVERYONE has a friggin story.

My wife and I are relocating to Austin this coming weekend and I'm unsure of what to do. Countrywide didn't reaffirm with me and my BK was closed and discharged in 4/09. My lawyer has told me that I have no legal obligation to the debt and that I'm free to walk away.

So if I do so can I cancel my homeowners insurance and just stop paying or what? What is the process?

Thanks for any advice, I know this is broad.

[Minnymouth]

Are you still making payments on your home??
As long as you still make payments (and did not reaffirm), the lender will not take possession of the home until you stop making payments.
Then the lender will declare you "default" and start foreclosure process to get the paperwork back in their name.
You are NOT responsible for the debt on the property (discharged), except for insurance (as long as its in your name).
You can move, but I would not drop the insurance (to protect yourself) until the lender takes control of the property.
Your attorney is correct that you have no obligation to the debt.

[justbroke]

If you walk away, call the lender and tell them that you are abandoning the property and canceling all utilities and insurance. Tell them, if they like, you will give them keys so that they can secure the property. However, you are outta there!

Perhaps, you can even get cash for keys?

[Confused33]

How would I get cash for keys? Tell me more about this!

I have been entertaining the thought of leasing it out but I'm afraid of the consequences if something happens while I'm 3.5 hours north.

Am I stupid to walk away or am I stupid to lease the house knowing that I won't have the cash to fix problems?

Thank you for the advice.

[justbroke]

How would I get cash for keys? Tell me more about this!

I don't know but some lenders like Countrywide have given owners money if they hand over the keys and move out. However, with how many foreclosed homes on the market, it seems many of these lenders want people to stay in them.

You could just stop paying and stay there through the foreclosure process (could be 6 months)... rent free.

I have been entertaining the thought of leasing it out but I'm afraid of the consequences if something happens while I'm 3.5 hours north.

I entertained this, and I am 6 hours from my rental property. It was just TOO much of a headache.

Am I stupid to walk away or am I stupid to lease the house knowing that I won't have the cash to fix problems?

Exactly. This is the biggest concern when you become landlord. I decided not to stay in this business. You could, purchase a home warranty which covers most inside maintenance and appliances, but that's still going to cost you. I did have a home warranty myself.

Where I wasted money, was when the renters stopped paying, and then when they left (after a demand to quit/vacate) I spent a lot of time and money getting the place rent/ready and trying to find someone! I tried both Lease and Lease/Purchase Option! Nothing worked out!

So, I surrendered it. Funny thing is, that was last July and they still haven't foreclosed. Matter of fact, I just received a Notice of Deficiency (NOD) to pay some $30K+ by July 3rd or face foreclosure.

[Confused33]

What do you do about the yard if you walk away? I know that sounds silly, but our yard is in awesome shape and I'd hate to do that to the neighbors. Not that I'll ever see them again. LOL

[justbroke]

What do you do about the yard if you walk away? I know that sounds silly, but our yard is in awesome shape and I'd hate to do that to the neighbors. Not that I'll ever see them again. LOL

If you work with the Lender, and the property is in an HOA, they will probably hire a service. I have no clue what my yard looks like at my rental property! I did receive a nasty letter from the City once, but told them I surrendered it to the Bank, and have not received anymore letters... even though it's still in my name.

When I abandoned my primary residence (just before filing), the HOA mowed the lawn. I then moved back in about 4 months after filing (after realizing that I could strip the 2nd mortgage).

[Confused33]

I love this website. LOL

Everything else worked out in my favor and I'm scared to death to lease it out. If something did go by the wayside with the lease I'd just give it up at that point.

I am more worried about someone in my family (namely my father in law) finding out that I bailed on a mortgage.

[Horse of Course]

Walk away! We did and we never looked back!

[mkuki]

You can move, but I would not drop the insurance (to protect yourself) until the lender takes control of the property.

Minny, can u clarify this part?

My attorney told me to cancel my insurance (condo insurance) coz when the bank detects that there is insurance, they move slowly in foreclosure. His opinon is that if anything happens to the house as they dilly-dally i.e. a fire etc, the insurance payout would help cover the note, which the lender can grab to settle the deficiency.

His advice was (a) cancel insurance then (b) inform the bank (and their attorney) that the property is not insured any more and that will snap them to attention.

Apparently property foreclosure in GA is taking longer than usual ...I wonder why (

[atolar]

we are in the process of walking away. been here for 10 months w/o paying mortgage and just now starting the foreclosure process... hoping to get a good 4 more months out of it.

[justbroke]

My attorney told me to cancel my insurance (condo insurance) coz when the bank detects that there is insurance, they move slowly in foreclosure. His opinon is that if anything happens to the house as they dilly-dally i.e. a fire etc, the insurance payout would help cover the note, which the lender can grab to settle the deficiency.

Your lawyer is obviously a bankruptcy attorney. He didn't mention the liability aspect of something happening to a person/child entering upon the home. Loss of the property due to casualty is one thing. Someone getting hurt ont the property... is a totally different thing.

This is why most will keep the property insured themselves. Again, you may follow your lawyer's advice, but ask your lawyer about a small child finding their way in the home, falling down the stairs, and breaking their neck. I'm pretty sure that you would personally be listed on any suit that followed.

But that's just me. (I am actually allowing my insurance to lapse on my investment property because the bank has taken way too long to foreclose. They will put insurance on it. Hopefully, it includes liability.)

[mkuki]

He didn't mention the liability aspect of something happening to a person/child entering upon the home. Loss of the property due to casualty is one thing. Someone getting hurt ont the property... is a totally different thing.

^^ Good point

Luckily, the property is a 3rd floor condo unit and the outside insurance is addressed by the HOA.

About getting into the property, that is not likely to happen (cross fingers), since it's locked and even if someone entered, there are no stairs to fall off from

[justbroke]

^^ Good point

Luckily, the property is a 3rd floor condo unit and the outside insurance is addressed by the HOA.

About getting into the property, that is not likely to happen (cross fingers), since it's locked and even if someone entered, there are no stairs to fall off from

In your specific case, I would recommend, telling the lender you are dropping insurance coverage and abandoning the unit... when you do so. That way, they will obtain an insurance policy.

[notadeadbeat]

Walk away! We did and we never looked back!

S*&^W THE LAWN..............LOL
We walked away too and felt bad about the yard all last summer so
we struggled to pay a guy to mow etc. If I had known now what I do
I'd have stopped paying the mortgage then too. Let the grass grow....
We drove by this week and it looks like it'll be ready to hayed soon!
It hasn't been mowed all spring. We just laughed about it when we saw
it and said how glad we are to not have to be tied to this place anymore.
I just don't care anymore.