Profile picture for user0632005

5 Years. Walk away, or keep struggling (foreclosure, short sale, etc?

Over the last 5 years my wife and I have continued to make pay our mortgage in a home we don't live in.
My wife and I left the Atlanta area 5 years ago. The company I was working for was going through tough financial times, so we decided to relocate. We ended up in the Tampa area.
We rent in Tampa, and still make our mortgage payments in Atlanta. It's been tough, but we have made things work. Financially it's killing us. We have had renters in our home for 2 out of the 5 years. Our last renters did a lot of damage to our home. We are in the legal process now to try to recoup some of that money.
Over the years we have met with attorneys, real estate agents. Some tell us to walk, and others say to tough it out.
My wife and I lived in a fairly large subdivision in the Atlanta burbs. We are asking 1/2 of what we paid for the house in 2006. The subdivision has several foreclosures right now. The foreclosures are selling for 1/2 of what we are asking.
Our mortgage lender won't even talk to us. We have never missed a payment. To make our payments things like saving for retirement haven't happened. My wife's pay has recently been cut in half. We are reaching into saving now to make the mortgage payment, and pay our rent.
I work in a specialized field, and there are just no positions near the house in Atlanta or we would move back.
We want to buy in Tampa, but we know if we walk that's not happening. I've also tried to refinance, but the home is not recognized as our primary residence. Also since the home is on the market the bank won't refinance.
Do we walk, or continue to toss money into it. 5 years after leaving we have lost $120K that I'm sure we never see back. I'd figure to sell the home we would have to drop the price another 50K to sell it. I just can't afford that.
After 5 years I've finally hit the brick wall, and need to make a decision and stick with it. Just looking for some sound advice. Thank you.
  • November 04 2012 - Atlanta
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Answers (4)

Profile picture for sunnyview
If I had been struggling for 5 years, I would walk, but you need to get legal advice first. Ask the lawyer if your state has deficiency judgements or not. Walking away will mean that you will probably not be able to buy in Tampa for 2-3 years at least, but that is a small price to pay for getting the struggle buried.

Getting legal advice is key to making the decision. If your state does have deficiency judgements, you may need to go as far as declaring bankruptcy to discharge your debt the bank on the mortgage. Often if you declare, the bank will scurry to cut a deal with you so they can short sale instead.

Banks care about money. As long as you are paying, they don't care what your life looks like. You are in a situation that is difficult, but you have to get off the fence and make the best call you can so that everyday your financial path gets clearer and not more difficult. If the bank will approve a short sale based on your move for your job, that would be much better than walking away. If not, you have to make the call to move forward one way or another.
  • November 04 2012
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Profile picture for Sally English
There are atorneys in Atlanta who specialize in answering this question.  I do not find the fees they charge to be unreasonable.  The defiency judgement after the sale is the nasty part of the process. Some lenders go for the jugular - particularly the ones holding second mortgages.  Other lenders do the short sale and the home owner never hears from them again.  Lenders seem to only respect the attorneys in the negotiation of the judgement part of the process.  
  • February 04 2013
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If the home is that far upside down as you claim and you can stand the hit to your credit score it might be wiser to cut your losses and dump the property and rent for the time being. But you should consult with a tax accountant and attorney before making any financial decisions.
  • February 08 2013
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I agree with the others, get sound legal advice in Atlanta.  If you decide to rent it again, list the rental through a real estate company that handles property management.  They can keep track of rental payments, repairs, etc.  They will also do background checks on potential tenants.  Should you decide to walk, a short sale is better on your credit than a foreclosure or bankruptcy.  Good luck to you.
  • February 08 2013
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