Top Mistakes People Make When Walking Away from a Mortgage or Strategic Default | by Fort Lauderdale Foreclosure Attorney

A misconception that people have when they decide to walk away from a mortgage in Fort Lauderdale is that they won’t have any more debt. Avoid these other mistakes of a strategic default.

With the housing market continuing to struggle, some homeowners who are desperate to sell their home have made the decision to walk away from their mortgage also known as a strategic default. Or it may be that paying a mortgage seems senseless if the house is worth less than the amount owed. In most circumstances, walking away from a mortgage (also known as strategic default) is not the best option. Before you decide to take this step, call an attorney to discuss possible alternatives available to you as a resident of Fort Lauderdale, Broward County, South Florida.

Mistakes Made When Walking Away from a Mortgage

One of the biggest mistakes homeowners make when walking away from a mortgage is assuming they will not be responsible for the monies owed. In fact, the very thing you were trying to escape could come back to haunt you.

Let’s say the value of your house is $20,000 less than what you still owe on it. It may seem to make financial sense to just walk away. But if the lender ends up selling your home for less than the market value, the money they lose could be your responsibility and you will be contacted to pay for it.

Walking away does not necessarily mean you have eliminated debt. At the very least, it may mean you have just delayed what you owe.

Another mistake that people make is assuming the lender will not work with them. Some effort should be made to work with the bank, servicer or mortgage company. Remember that they do not want to get stuck with a house that can’t sell.

You should be aware of the alternatives they may offer you, such as a loan modification, a short sale, deed in lieu of foreclosure, In Rem Judgment (no Liability) or a consent final judgment with no deficiency (no liability) . A planned foreclosure, rather than just walking away, could be another option and a better one at that. Assuming your goal is to do the responsible thing and offer the property back to the bank, there is a proper way to do it. Many times, your requests to the bank, mortgage company, or servicer fall on deaf ears. Many times, you need to beat the bank in court a few times before they ultimately agree to waive personal liability and agree to one of the settlement options such as deed in lieu of foreclosure, In Rem Judgment with no deficiency, or Short Sale. You may be able to achieve the best of both worlds; keep the property for several months while waiting for the bank to accept your foreclosure lawyer;’s settlement offers while you collect rent or continue to live in your home and ultimately get paid (Cash for keys) up to $30,000.

You have to be willing to take the necessary steps to explain your situation and determine if there is a way to work it out. You might be surprised to find there is a workable solution that makes everyone happy.

Failing to consider the impact walking away could have on your credit is another mistake that people make. In fact, you may be thinking that the answer to your problems is to rent something instead of owning a piece of property. But when your credit score drops, as it certainly will if you default on your loan, it could impact your ability to rent later on, let alone your ability to purchase another house in the near future or if you need a loan for something else. In the short-term it might not matter what your credit score is. But long-term it could be a huge financial nightmare for you and your family.

Another mistake made by people when they are considering walking away from their mortgage is not seeking legal counsel. An attorney can present other options that may preserve your credit and your financial security. It is always best to explore your options first.

Contacting a Fort Lauderdale Foreclosure Attorney

There are consequences when an individual makes the choice to walk away from their mortgage (strategic default). Most people have other options available that they either do not know about or incorrectly assume will not work for them. Never make assumptions about something that can severely impact your future.

The best thing you can do is contact a Fort Lauderdale foreclosure attorney. A lawyer can explain alternatives that may better your financial situation or allow a planned foreclosure if it is absolutely necessary. By going about this the right way with legal counsel on your side, you are protecting your future. An attorney may even be able to work with your lender.

The attorneys at The Neustein Law Group, P.A. serve residents of Miami-Dade County, Broward County, and Palm Beach County, as well as other counties throughout Florida. When you are feeling desperate to find a way out of your financial mess, consulting with an attorney can help you do it in a way that is best for you and your family. Contact us today: 954-606-0747 (Ft Lauderdale Office), 305-531-2545 (Headquarters), 888-400-ATTY (2889) (Toll Free).