ANSWERS: 1
  • He may be liable for the deficiency balance (the difference between the mortgage balance (plus foreclosure related fees) and the NET selling price. He would be wiser to surrender his deed in lieu of foreclosure if he just wishes to walk away. In any event, his credit will be ravaged. He will be unable to obtain a conforming mortgage for at least three years (possibly longer as underwriting guidelines are changed further), he may be required to bay the most excessive interest rates if ever he is able to obtain credit (30% for auto loans, etc.). Credit cards are pretty much out of the question, unless secured by a cash deposit. No, he will not get off "Scott Free". His auto and home insurance rates will be twice that of those with respectable credit scores. He will pay dearly for the next decade.

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