Legal ramifications of abandonment...

[Don Aban]

My question relates to the legal issues surrounding the act of abandoning my house in NY state, which I currently hold the mortgage on. We have been in the house for 2+ years and are attempting to relocate to a nearby city, our house has been on the market for 3 months now and we've dropped the price considerably. A friend told me he heard about people who have simply abandoned their homes, moving everything out, and leaving. My question is, would this affect my chances of getting another mortgage for a new house? Or is this simply written off by the bank? We're not sure if this is a good idea, but I'd hate to go through all the trouble of dropping the price again and losing money if there's a 'free and clear' way out of this.
Please advise!?!

Don A.

 

[ray57]

Great idea! Ditch the house. I don't see any problem with it. I asked a friend of mine about it who once wanted to go to law school, and he agreed that it would be OK. As a matter of fact, this technique of abandoning houses is getting pretty popular around the country. You likely can find a new house where you are moving to that is abandoned as well. Best of luck.

-Ray

 

[Prince William]

You failed to mention the amount of equity you have invested in your current dwelling but I must assume it is not that much. Based on this assumption, WALK AWAY! Getting another house could present a few challenges, none of which cannot be overcome. If you have a child, place the new mortgage in the child's name with you and your wife as co-signers. With the lower income base, you may even qualify for public assistance. Better yet would be to apply for and receive a SS# for a pet. This way when the pet dies, you can inheret the house free and clear. If you bury the pet(a.k.a. "previous owner") on the property, you may also be eligible for the same benefits and considerations(public domain rulings) that cemetaries receive. Good luck

 

[HomeGuru]

Good responses.

I might add that there may be a chance (say 100%) that:

1. the mortgage lender would file foreclosure and get an automatic default judgement against you.

2. Once the foreclosure is filed, a lien check or credit report on you would list the foreclosure court action.

3. At the forclosure sale, there may be vultures or opportunity seekers that may bid 10 cents on the dollar.
Resulting in a big loss to the mortgage lender.

4. The mortgage lender would file for a deficiency judgement against you for the amount of their principal and interest losses (including legal fees, court costs, Trustee fees etc.). And the judgement would be reflected on your credit report.
While all this is happening and with the timely events, your credit (FICO) score will be going down further.

5. No mortage lender will give you a new mortgage with your low credit score, a foreclosure record and a history of abandonement of mortgaged property. Not even subprime or hard money lenders that charge high interest rates.

So in summary, if you discover a "free and clear" way to walk away, please let me know.