Over the past months homeowners have been walking away from their mortgage due to either being in an underwater situation and facing severe negative equity or being unable to make their mortgage payment as a result of financial hardships, but also, being denied home loan assistance plans that may lead to a lower monthly mortgage payment. However, there have been opportunities for homeowners to find assistance which will avoid the need homeowners feel to strategically default on their home loan, but there are still questions as to whether homeowners should attempt to ride out housing difficulties or simply walk away.
A recent article on Foxbusiness.com made mention of this problem that homeowners have when they feel they are in a bad mortgage situation and have no other option. There have been homeowners who feel that, as a result of economic and personal financial troubles, keeping debts like credit cards paid is more important than meeting one’s mortgage payment due to the fact that many have been relying on credit as a way to stay afloat in some areas.
As underwater home loans become more problematic and common in some areas of the nation, various homeowners have chosen to simple leave their home and take the hit to their credit score. While there are those advisers who feel walking away should be a last resort, there are also some analysts who say homeowners should never consider strategically defaulting as this can cause one’s credit score to substantially decrease, which could be problematic when looking for renting opportunities and reentering the housing market will not be an option for years down the road.
It’s true that there are some homeowners who are unconcerned with these drawbacks, but some servicers can pursue a homeowner for funds that were lost as a result of walking away as well. For these reasons, among others, homeowners are being prompted to seek out modifications or foreclosure alternative plans rather than walking away.
Home loan modification plans have been offered over the past months as a way to lower home loan costs, but there are problems that have arisen then homeowners have pursued this course of action. Yet, foreclosure alternatives have also been one form of assistance that homeowners have been able to use as short sales or deed in lieu of foreclosure programs have been one method that homeowners have used to escaped a bad mortgage without defaulting and walking away. While these plans are not always a guarantee, homeowners stand a better chance of finding themselves in a more positive financial position when all is said and done if they work with their servicer than simply leaving a home sitting empty by walking away.