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    Walking Away from an Underwater Mortgage in DFW

    For people who find themselves owing more for their mortgage than the current value of their home, it might be surprising how many others are in the same situation. Recent real estate estimates approximate that more than 10 million people currently have underwater mortgages which they pay every month. What that means is that huge numbers of homeowners hold the same unfortunate position that you hold. To continue to pay large sums of money each month for a mortgage on a home that has a value that is below the mortgage balance is the definition of being upside-down with a home mortgage, and it can feel like a desperate spot. It can feel like money is being poured down the drain as you watch significant percentages of a monthly budget squandered by paying mortgage interest and essentially an unreasonable house payment and finding no solid plan to get out of the situation. Modifications are extremely difficult. If you choose to stay in the home and hope for better real estate prices in your area, you could find yourself paying for a decade or more to catch the value of the home up to the mortgage balance.

    If you cannot afford the payments and do not want to keep up the monthly payments, often a good option could be contacting the lender and requesting approval on a deed in lieu and moving forward with an orderly plan to ultimately let the house go. Bankruptcy with the Bright Law Firm of Richard Weaver can also provide the option of using a bankruptcy to protect you while you get your affairs in order to leave the home. In the case where you have the financial means to continue with the mortgage payments, you could use a chapter 13 bankruptcy to catch up any late payments and stay in the home. A deed in lieu and a chapter 7 bankruptcy to eliminate financial and legal liability on the home is reserved for homeowners without financial means to continue the monthly house payment. For those homeowners who are capable of resuming or continuing with the monthly payment, a simple and cost effective way to deal with the situation could simply involve stopping any future payments (or not resuming payments) and walking away. A chapter 7 bankruptcy could help with the elimination of any future liability. Or if a homeowner does not qualify for chapter 7 bankruptcy, there are other ways of dealing with the mortgage deficiency and any subsequence mortgage deficiency judgment.

    About Texas Strategic Default

    A strategic default is different from a normal default. If a mortgage borrower cannot make her or his next mortgage payment, they could begin falling further and further behind, while attempting to make as many payments as possible in this difficult situation. That is a normal default, while a strategic mortgage default applies rational decision-making principles that result from a careful analysis of a homeowner’s situation. Strategic default also goes by the term of “voluntary mortgage foreclosure,” as a homeowner quits making the monthly payments, thus inviting the bank to move forward with foreclose proceedings on your home. Foreclosure can take much longer than homeowners expect: lasting in some cases as short as weeks, lingering in other cases for months and in other circumstances for longer even into a period of years as the mortgage lien holder sifts legal issues.

    What is the Effect on Credit Scores Of a Strategic Default?

    Strategic default holds major sway over a homeowners credit score after the bank forecloses. Yet under careful examination, a borrower also has opportunity to divert money that was previously aimed at paying the large monthly mortgage payment to other expenses or even toward savings. Under the scenario where a chapter 7 bankruptcy or a chapter 13 bankruptcy, the borrower’s other debts could be completely or partially eliminated, and in the absence of the former debt, credit scores even go up almost immediately in some situations. If a person continues living in the home without that monthly mortgage going to the lender, they also have no rent payment for a period of time. Do you need a lawyer to help with preventing, stopping, or dealing with the subsequent issues of a home foreclosure in DFW? Contact the Bright Law Firm of Richard Weaver now for a free consultation with a DFW strategic default lawyer to learn more about this option and to begin working on your case. By Pete Maughan.