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To Move or Not To Move? Do I declare bankruptcy and give up my house... or try and fight it?
I have a home for which I paid $335,000 at the highest point of the real estate market. The house is now worth $200,000 at best. Recent struggles have put me two months behind. I can catch up but it will not be easy. My wife and I have seen a significant income decline. Leaving the house and filing and bankruptcy could hurt my future employment prospects. Should I keep the house and try to catch up or let it go and face financial ruin?
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Before you do that check into something called a H A R P loan. I do not know to much about them. They are suppose to be for people like you who are upside down on their mortgage and as you may have suffered with significant income loss as well. These loan allow for refinancing the loan at lower rates and possibly adjust the amount of the loan itself.
Each state has different rules so you need to go online and check for a HARP Loan. Follow the prompts for your state.
Then there is also the possibility the bank will agree to what is called a short sale of your home. This is where you sell your home at or around current fair market value. Which is what your bank would have to do if it foreclosed. Fact is a home sells better and faster if it is occupied and is kept up then if unoccupied and vandalized in any manner. Banks have many properties already on the books unsold so your bank may be willing to allow a short sale. I'm not sure how this looks on your credit rating though I'm fairly certain it looks better than a foreclosure as it is a negotiated settlement.
There are a number of programs out there to avoid foreclosure. Do not expect or trust your mortgage bank to tell you of these programs. They don't have the time or inclination to do so. Contact your county or state office for information on programs that can help you if you want to remain in your home.
I would also suggest you contact a real estate attorney for legal advice on some of these programs and how or what the long term effects to you would be. The more educated you are the more beneficial it is to you.
The long and short of my answer is this. If you want to stay in your home there are programs out there you may qualify for to help you stay in your home. You just have to find them the bank is not going to tell you about them. If you want to walk away from your home there are programs that will allow you to do so as well. Different programs may have different long or short term financial effects or penalties on your credit rating. You need to know what these are before you decide which program best suits your families needs.
Good luck, I hope I have offered some help.
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