Cramer: No really, dump your house
I know that this clip has been all of the HP blog-o-sphere. I think it bears repeating. However, if you do not remember, the law deciders changed the bankruptcy laws.
Just becareful.
Housing Panic has a good thread about this.
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4 comments:
Tell me if I'm wrong.
Here in IL, from what I have heard, you will get a deficiency judgement if your house sells for less than the face amount of the loan.
Maybe it is worthwhile just to eat it and pay it back, to avoid a bigger loss later.
But if I were underwater in the house, I'd just bite the bullet and keeping paying, unless I were in an area that was deteriorating and where I could see that the future in 10 years would bring nothing but further losses.
A foreclosure is worse than a bankruptcy on your record,and it's much harder to bankrupt now.
The North Coast said...
Tell me if I'm wrong.
Here in IL, from what I have heard, you will get a deficiency judgement if your house sells for less than the face amount of the loan.
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Yes, IL is a d. f. state. The info 1/2 down the link.
Also, if you manage to get out of the d.f., the IRS will count the short sale claiming debt dodge as income!
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Are deficiency judgments permitted in Illinois?
Yes, adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. Deficiency judgments are not permitted in cases ofConsent Foreclosure or aDeed in lieu of foreclosure.
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A foreclosure is worse than a bankruptcy on your record,and it's much harder to bankrupt now.
August 6, 2007 6:02 AM
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That I do not know. My gut says bankrupty is worse, but if you have data showing the other way, pls post.
GREAT FUTURE TOPIC!
I wish I had the data myself.
I was told this by a loan officer, and bank people I've talked to seconded this.
Could it be because bankruptcy covers everything from CC bills to medical bills, while a foreclosure makes it too obvious you walked away from a house loan?
I'd like to know the reasoning, myself, and would be grateful for a reasoned explanation.
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