Accepted Answer

Thanks for the question.

 

I'm sorry to hear about your current situation; it sounds like you've had a rough time.

 

It's never a good idea to walk away from the house without having exhausted all opportunities. If you walk away, the first or second lender can pursue you for any deficiency.

 

Now, that being said, you need to conatct your first mortgage lender to try and do a loan modification. A loan modification would reduce your balance and/or interest rate to get your payment much lower. Lenders are doing this because it's better for them to work with you than have another foreclosure on their books. If the lender can't help - then conatct your local mortgage loan officer - they can help as well.

 

Also, if that doesn't work, you should contact your local realtor - they can negotiate with your lenders to obtain a "short sale" of the house. Meaning, your lenders will allow a normal sale of your house by reducing the balances to meet what the market will be willing to pay for your house at this time. Again, it's better for them than to foreclose on you.

 

Finally, if things do get worse - you can file bankruptcy and have the court modify your loans in order for you to keep your house.

 

I believe your lender will work with you for a loan modification. But again, it's good to know your options and walking away usually isn't the best idea.

 

Hope this helps !

Expert:	James Heal
Pos. Feedback:	100.0 %
Accepts:
Answered:	1/19/2009

Financial Advisor

15 years expertise in all ares of personal finance, including credit cards, mortgages, real estate.