What if I am underwater on my mortgage? Shouldn’t I just walk away?
While the values of many Florida homes have recovered since the real estate crash, several homeowners still find themselves in a situation where they owe more on the mortgage than the property is worth. As recently as a few years ago, many homeowners simply walked away and allowed the bank to foreclose; a practice commonly referred to as a strategic default.
It seems like a simple enough concept: I can keep overpaying for my home, or just give it back to the bank and let them deal with it. While choosing this path may get you out from under a financially unfavorable situation, giving up your home to the lender may not be the end of the story.
So, what happens when I walk away from my home?
What many homeowners do not understand is that lenders may have the right to seek compensation from the original homeowner (that’s you) if they are not able to sell the foreclosed home for the full amount of the outstanding mortgage. Before you make a decision that could have far-reaching implications for your short- and long-term future, it is important that you fully understand the implications of a strategic default on your home.
Know your options before you make a potentially harmful decision.
If you are underwater on your home, it is important that you explore all options before you take any action. Speak with a lawyer who handles these types of matters on a fulltime basis. Depending on your situation, it may be possible for you to take advantage of recent changes in Florida law that require lenders to review your mortgage and attempt to work out new terms whenever possible.
A lawyer can help you through the process and work to get the amount of your mortgage reduced to reflect the current value of the home. You have worked too long and too hard to just give your home away. Learn more about how a lawyer can help you lay the groundwork for a brighter future for you and your family.