Can I Walk Away From my Mortgage?
Updated: Jan 13
Walking away from a mortgage is something that depends on the personal choice of the borrower, there are a lot of people who choose to walk away from the homes that they mortgaged, this is due to the fact that the value of real estate fell drastically in the last few years.
There are however certain states that make it the obligation of the borrower to repay the amount to the lender regardless of the circumstances. However there are also states that protect the borrower who have borrowed an amount that was in tune with the value of the house or the real estate at that time, however now the real estate is worth a lot less than the value of the loan.
This is a tricky subject and the last thing that a debtor wants to find out is that they are liable to be sued for making such a decision. This is the reason why it is considered to be a very wise decision to check with a good lawyer before making any such kind of resolution. There are a lot of pros and cons to this action for the borrower, and in certain cases it would not be a wise decision for the borrower even if they can do it.
This is due to the fact that in certain cases the long term repercussions of such actions can have an impact on the credit rating of the person, and hamper future financial dealings that they have with the banks.
Mitchell Reed Sussman & Associates advises a lot of clients regarding the best options that are available to their clients to secure them. And there are a lot number of options apart from what people assume. There are more to it than just walking away from the home, or repaying the high amounts that are required of the borrower.
According to “legislature enacted Code of Civil Procedure section 580b” in California a person has the right to walk away from the deal, without fear of prosecution from the law or the lender.
As Mitchell Reed Sussman & Associates puts it a lot of the decision is also based on certain facts, and these are as follows, can the borrower afford to repay the amount, does the borrower want to leave the house, or does the borrower believe that the realty market will recover. These are also important points that need to be taken into consideration.