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zengregg
Flash in the pan


Joined: 13 Aug 2009
Posts: 48

People that walk away from their house
PostPosted: Wed Oct 21, 2009 3:23 pm Reply with quoteBack to top

You here about people that could pay their mortgage, but because of the decline in value decide to walk away from the house. Is it really that easy? Doesn't the lender file a judgment against them or garnish wages, etc? What does a lender normally do to the borrower?
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BIGTXLENDER
Dyn-o-mite!


Joined: 22 Nov 2008
Posts: 217
Location: TEXAS

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 4:13 pm Reply with quoteBack to top

i am assuming with 1000's of people doing it the lenders do not have the man power nor the funds to chase them all down and try to collect.

and also depends on state laws , for example in Texas you cannot garnish anyone's wages for consumer debts. unless you are the IRS or OAG office for back child support.

you can sue them and get a judgment but you may never collect and they are only good for 10 yrs in Texas then if you do not re-file them its just goes away....

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zengregg
Flash in the pan


Joined: 13 Aug 2009
Posts: 48

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 5:20 pm Reply with quoteBack to top

Some states you can garnish (like Virginia) for consumer debt. I wonder why the lenders do not hire a staff to do this? Seems like alot of money out there if the lender is in a state that permits it?
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Miseryunderwriter
Flash in the pan


Joined: 23 Apr 2009
Posts: 29

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 5:47 pm Reply with quoteBack to top

Ah jingle mail. Most Lenders find the keys in the mail, report it as Deed in Lieu and foreclose. Most do not spend the money or manpower to pursue further. Like getting blood from a turnip. and ...I could be wrong but don't judgements in all states fall off after 10 yrs if not re-filed? I'm just curouis ....got me thinking.
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zengregg
Flash in the pan


Joined: 13 Aug 2009
Posts: 48

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 5:52 pm Reply with quoteBack to top

20 years in Virginia
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Miseryunderwriter
Flash in the pan


Joined: 23 Apr 2009
Posts: 29

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 6:33 pm Reply with quoteBack to top

Good to know. All the states I tend to underwrite in are 10. Thank you for the answer
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mortgagewoes
Flash in the pan


Joined: 07 Feb 2009
Posts: 30

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 8:59 pm Reply with quoteBack to top

walking away is the easiest thing a homeowner can do - in NJ you can just stop paying, live in the house for another 12 months free of charge and then move on out! once the lender forecloses and gets the house, you will not hear from them again - unless you have a 2nd mortgage - they will come after you like white on rice!!

what do you think all those subprime AE's did when their companies tanked - they stopped paying and moved on!!
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Miseryunderwriter
Flash in the pan


Joined: 23 Apr 2009
Posts: 29

Re: People that walk away from their house
PostPosted: Wed Oct 21, 2009 9:14 pm Reply with quoteBack to top

and they will not be owning another home again anytime too soon. Many states have also removed the period of redemption after foreclosure. CO used to have 1 yr after foreclosure. no period after foreclosure now. FNMA has the toughests (currently) rules about home ownership after Foreclosure. VA has the lightest. I've seen some real craziness of folks who think they are entitled to ravage the property they have lost.....such as a furnace as a parting gift. to then trying to justify why they deserve another home prior to the guideline allowances. have to say, most I'm ot real warm to. Go figure.
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Mitsu
Dud?


Joined: 22 Oct 2009
Posts: 9
Location: Georgia

walking away
PostPosted: Thu Oct 22, 2009 3:59 am Reply with quoteBack to top

Walking away is not just a stroll in the park.Banks have the right to pursue through the courts to file for the deficiency judgment. (Some states have restrictions).
When you walk away and let the bank sue you for lawful possession of the property they secured with a mortgage, they have the right to come and collect their full loss, including cost to resell, repair, carry/hold, and attorney fees. I believe in most states, they have a few years to file for the judgment. It's your debt and you owe it.
You have to file bankruptcy and a US bankruptcy court has to agree you do not have the means to repay the debt you are asking the government to forgive.
Walking away just because the market plunged and you don't want to pay any longer does not qualify for the relief in debt.

Yes, a lot of banks send the IRS 1099c and cancel the debt, but not always. If they send the 1099c, you have to pay tax (yes, income tax) on that 1099. Talk to your accountant about it. I think it is in IRS publication 928 regarding the 1099c. If they don't cancel the debt, well would think about what happened to that debt. It didn't just walk away because the homeowner walked away from it.

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tinabee
Dud?


Joined: 01 Nov 2009
Posts: 4

Re: People that walk away from their house
PostPosted: Mon Nov 30, 2009 12:30 pm Reply with quoteBack to top

Walking away from your home isn't all that hard. For one thing, the Mortgage Debt Relief Act is effective until 2012. If you avoid being served a summons (not hard to do, I've done it.) and your notice gets published in the paper, the bank cannot come back after you for a deficiency judgment.

I know in Indiana there is an option to go through a consent foreclosure with the bank. If you file for that, the bank cannot by law come back after you for any deficiency.
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