Walk away from your mortgage?

Many homeowners who have seen the values of their homes decline by 30 - 50% over the past couple years are beginning to think about their mortgage in much more objective terms. Rather than hope against all signs to the contrary that their homes will someday return to the valuations prior to the crash, some people are deciding that their best move is to simply walk away from their mortgages in the same manner that banks have walked away from their obligations since 2008. The New York Times writes about this phenomenon in the article below.

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html?emc=eta1

Taking this course of action is not without consequences and should not be entered into lightly or without professional guidance. Michigan law allows banks to sue for a deficiency judgment following a foreclosure of real estate so simply walking away from a home that is "underwater" is not necessarily a clean or a good solution for those ownning property in the state.

I have helped people think strategically about their residential mortgages for fifteen years and everyday I talk to homeowners who owe more on their homes than their home is worth. In these challenging times it is important to consult professionals who understand bank loss mitigation departments and Michigan foreclosure law before doing something that may result in the loss of your home, damage to your credit and litigation.