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I've been going back and forth on what is the best option for people. I know in Wayne Country, Michigan the Sheriff stopped doing Sheriff sales since they could not sleep at night. They are trying to hold out for a better option for home owners.
Say your paying $1500/month for a mortgage and insurance, paying about 50% of your income on housing per month, which option would you take and why.
I have seen quite a few people just walk away, take what they need and leave the rest behind, I would hate to see myself or any friends take this option.
Chapter 7 would stop the mortgage company from garnishing your wages and allow you to leave the house behind, but I heard they are so overwhelmed at the moment that for them to go though the effort to garnish wages is not worth their time at the moment.
Chapter 13 get everything rolled into one payment, I hear most of the people who take this option end up going back to default 6 months later. I'm not sure if it's a good choice or not. It would keep the house vacant but if Obama and his administration does something to help people in the mortgage crises you may end up worse off and paying more for your house than those who waited.
Let Obama come along and fix things, let it go into foreclosure and sit and wait it out until he has some sort of plan signed into law, then maybe you would end up putting 31% of your income towards your mortgage vs paying a considerable amount more.
You are not giving enough details. Are you upside down on the mortgage? Can you survive on the other 50% of your income? How did you get into this mortgage in the first place? How many people in the family? Can someone get a job to help out?
My husband and I are underwater in our house. We pay $1246/month for it; including PMI, insurance and taxes. I'm on disability and we are going to continue to make our payments until I can get back to work and hopefully pay off some extra principal. We are going to wait it out and try to sell in a couple of years. Although we were naive and should not have taken the advice of the financial advisor and my step-father years ago when we bought a house in a place we hated, we signed the contract and will continue to be responsible and pay on it.
You have an option missing in your poll: Tough it out, tighten the belt, work 5 jobs if necessary, get/keepthe mortgage current until you could maybe refi at a better rate/payment. Why are all the options some variation of "walking away" either outright, through bankruptcy or waiting for a govt handout? This is SO much of why the larger problems won't go away.
There are a lot of different scenarios that lead people into their current circumstances. So I don't think there one solution that is going to work for everyone.
With only 50% of your income going toward the house there's a lot left to pay the other bills. That's not that bad, you really don't have an excuse to foreclose IMO.
This is a loaded question/poll. Too many variables.
Myself, I would have known better than to get myself into something I couldn't afford in the first place. Common sense 101.
If some other circumstance came up (medical, for example) with unforseeable financial implications, well, that's the card I'm dealt and I'd have to find a way to deal with it as a responsible citizen.
Otherwise, suck it up and deal with the situation you got yourself into. Find a way, instead of convincing yourself there is no other way.
Actually I'm thinking about painting the outside this spring, maybe take out some oversized bushes and plant something else. Painted the inside not long ago, roof is 4 years old so it's fine.
Oh yea I didn't buy more house than I could afford, and I have paid it off. What a novel approach to buying a home, and a huge percentage of people use the same principle when they bought their homes. The greedy and the bad at math are the ones that have crashed the housing market.
I just did the Math, there is no way I can make my payments unless I have the ability to not consume food of any type. I'm about $320 short / month. My job doesn't allow me to get a second job. I'm just frustrated, I know I made a mistake by listing to my mortgage person when they said I could afford much more than I originally wanted my payments to be. Instead of listing to myself I let them talk me into taking more than I wanted. They hooked me saying my payment would drop $300/month after the first year, which turned out to be BS. I'm on the 3rd year of this house, I love it, I hate to loose it but I don't see any other way out.
I just want to be done with it or somehow work it out so I'm not in limbo anymore, I hate being in limbo.
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I didn't buy more house than I could afford, and I have paid it off. What a novel approach to buying a home, and a huge percentage of people use the same principle when they bought their homes. The greedy and the bad at math are the ones that have crashed the housing market.
