What will happen if we walk away from a mortgage?

[Mayla]

What is the name of your state? Oklahoma.

My husband and I own a manufactured home. We know it is very hard to sell a manufactrured home. We are looking to buy a different home at this time. We were planning on waiting until our current home sold. However only a hand full of people have looked at it, and that was within the first week we put it on the market. It has been on the market about two weeks. We were wondering what the consequences would be if we just walked away from it and let the bank have it?

 

[CheeseBlotto]

Your credit will be shot. The mortgage holder will sell the place, and assuming the likely scenario, will sue you (successfully) for the shortfall of what they get and what you owe.

On the market two weeks? I live in a growth area, and the typical home is on the market 90-100 days.

 

[HUD-1]

Bank would foreclose and resell. This might lead to a deficiency judgment and/or it might lead to IRS tax liability. First, leave it on the market longer. Second, you could attempt a short sale with the current lender if you can't sell it for the amount of the debt. Also, couldn't you rent it out? If you walk away, it will be years before you are able to buy again at a decent interest rate...

 

[nextwife]

ALL markets are soft right now. I've had a well-decorated, priced based on close comps, quality built condo that I partially own, in a high demand area, on the market for a month with no offers. It's not just manufactured homes.

If you are priced right, you WILL get a buyer. But don't expect to be able to buy another home, unless you can pay CASH, if you walk from this one. Lower the price, if need be.

 

[CJanssen]

don't just walk away from the home. Picture this, if you went to a car dealer right after a repo...do you think they'd jump up and down to help get you financed? Same thing with a mortgage.

 

[acmb05]

ALL markets are soft right now. I've had a well-decorated, priced based on close comps, quality built condo that I partially own, in a high demand area, on the market for a month with no offers. It's not just manufactured homes.

If you are priced right, you WILL get a buyer. But don't expect to be able to buy another home, unless you can pay CASH, if you walk from this one. Lower the price, if need be.

Not true at all. We get people approved all the time who had Bankrupcy or foreclosure in the last 3 to 4 years. Granted your interest rate will be two to three points higher than normal but you can get approved. I just recently sold a house to a couple that got approved and the husband had a bankrupcy discharged just 2 years ago.

Now as to the OP, unless the home is in need of a lot of repairs you can almost forget a short sale. I would try renting it or doing a lease purchase on it. Let someone else pay the mortgage on it untill you can sell it. Modulars are not good for resale and I hope you are not planning on making a profit on it. Why people buy them is beyond me, For the price of a modular you could build a fairly nice house that actually goes up in value.

 

[PghREA]

Don't walk away from it! You'll screw up your credit rating. It will be harder to get approved for a mortgage on a regular house and you will pay a much higher interest rate if and when you do get approved.

2 weeks is not long for a home to be on the market!

 

[nextwife]

Don't walk away from it! You'll screw up your credit rating. It will be harder to get approved for a mortgage on a regular house and you will pay a much higher interest rate if and when you do get approved.

2 weeks is not long for a home to be on the market!

Two weeks is NOTHING. I just got a nice offer (without dropping the price) on a condo that has been on the market only about five weeks- and with a closing in three weeks.

 

[pojo2]

Are you talking a trailer on a rented lot or are you talking a modular home that was put together on your lot?

If a trailer and you did not put a large down payment on it you are lready upside down and a profit is not a reality. You will probably have to come to the sell with money in your hand to pay the difference.

They depreciate soooooo rapidly.

Walk away and it will cost you dearly to get another house. You can secure a subprime loan as long as the mid fico score is above 500 points. You will need a LARGE down payment and the interest rate will be in double digits.

But people do it everyday, get in over their heads then start screeching about their PREDATORY lender.