What are the ramifications of strategically defaulting on a home loan?

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What are the ramifications of strategically defaulting on a home loan?

We currently owe more than what our home is worth.

Asked on August 10, 2012 under Bankruptcy Law, Iowa

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

No attorney can tell you to shirk your legal obligations.  If you default and the bank forecloses it will have an affect upon your credit rating for years to come.  And if the house sells for less that the mortgage then you will end up with a deficiency judgement against you.  A deed in lieu of foreclosure or a short sale make by better options.  Both with waiver of deficiency.  Good luck.


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