It's so easy to just give up, but DON'T DO IT!

There was a lively conversation amongst agents today about a blog post from an agent who wondered about the fairness of a homeowner being pursued or penalized in any way, when that homeowner walks away from a property that has lost value since purchasing that property.

Indeed, I have a personal acquaintance who had exactly that plan in mind, to simply close the door and walk away from the home after watching its value slide after a handful of years of ownership. The negative repercussion of such an action were numerous and significant: that owner's credit score would be in tatters (and yes, it does matter about your credit score, even when it comes to getting a job, or keeping your credit card interest rate at a reasonable level, to say nothing of the multi-year lock-out from getting another mortgage loan in the future), and it would be a vacant property for many months before the lender could regain control of the property to secure it and ultimately find a new buyer for it. In the meanwhile, the neighbors to this property would be dealing with an abandoned property, and all the problems that accompany that situation.

Here is all I want to tell you, if you find yourself in a bad situation with the value of your home as compared to the mortgage note (or notes) you signed on this home. If you can well afford to pay the mortgage every month, you like your home, have no reason to move to a new location, why risk ruining your housing future for 7 years (Fannie Mae has promised to BLOCK anyone from getting a new mortgage for 7 years if the homeowner simply walks away from the property and the loan), facing the possibility of having that lender you want to "stiff" simply go to court and get a judgment against you that will follow you for the rest of your life if you life in a recourse state, and putting your neighbors into a position of having to worry about an abandoned property in their midst? Stay put.

If your home is worth less than what you owe on it (you are "under water" or "upside down"), and you are financially challenged for any reason that causes you to not be able to pay your mortgage every month, get mortgage counseling, talk to your lender, talk to your tax accountant, talk to your attorney, and get the right advice that you deserve. There is a way out of the dilemma that you are in, but walking away isn't it.