AboutJim Hoepf Expertise I have a diverse background that allows me to answer questions regarding underwriting, collections and industry changes.
Experience I have 18 years of experience in the industry. I have an extensive underwriting background that allows me to have a greater understanding of how to properly structure a loan for approval. I have been cohost of the local radio show Real Estate Matters for the last four years. I have owned and operated my own brokerage firm for the last 10 years. Along with originating and underwriting I have also handled mortgage delinquency and the foreclosure process.
Education/Credentials BS in Business Administration from Bluffton University. I have also participated in numerous underwriting workshops put on by Fannie Mae and lenders in the Phoenix area.
Awards and Honors Broker of the year for Arizona with Homeside Lending.
Expert: Jim Hoepf Date: 7/11/2008 Subject: Walk away from current mortgage
Question QUESTION: I have a jumbo loan at 950K, the house value is appraised at 1.05M. Our current situation is not allow us to keep paying the mortgage. We decide to walk away form it and move to other smaller house we have now. What is the consequence beside the lowing our credit? Will bank go behind us on our other assets? What is our legal obligations? How to walk out the mortgage payment and move out? What kind preparation we may need? Please advise. Thanks, JZ
ANSWER: JZ,
First, I would contact the lender and tell them the situation. You may even want to suggest to them that you will sign a "Deed in Lieu of Foreclosure." This basically gives the house back to the lender before foreclosure actually starts. It is my understanding that this will have less of an affect on your credit than an actual foreclosure.
The bank should not be entitled to go after any other assets that you may have. As far as other legal obligations go, just make sure the house is secure and the potential for damage is reduced. It is my understanding that if the owner trashes the home before leaving, the lenders will take action against you.
I hope this answers you question completely. Let me know if you have any other questions regarding this matter.
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QUESTION: Thanks for the advise.
We are two payments behind already. Is it too late for "Deed in Lieu of Foreclosure"?
Please advise.
Many thanks. JZ
ANSWER: JZ,
It shouldn't be. I would call the lender today and discuss the options with them. The best thing to do with the lender is to be proactive and not ignore the situation.
I hope this helps you out. Good Luck!!!
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QUESTION: Thank you so very much for your advice.
Someone suggested if I want to walk out me and don't contact the lander, just wait till what happens. This way may let me gain more time to move out. We have perfect credit scores at more 800 for either of us. This is the 1st time we are late payment in our whole life. I don't need any good credit for any loan in the near future, like 7 years. If we don't care about our credit score what advice you may have for us. (by the way, do we risk our current credit cards we already have?) Thanks, JZ
Answer JZ,
You can wait and see what happens, but I don't recommend it. Its best to be proactive and move on. If you wait and they foreclose on the property you are looking at probably about a 250 point hit to your credit score. The problem with that is that some credit card companies do random checks on your score. If that happens and your score has dropped that much, they could cancel your credit line. I'm not sure if that is a risk you want to take.
