Dangers of Walking Away from a MortgageSome homeowners who are underwater are turning to strategic defaults where they just walk away from a mortgage debt. But financial experts are saying that that can be dangerous such as the possibility of the bank obtaining a judgment to pursue the homeowner’s assets like bank accounts, cars and investments.
Another problem, the Birmingham movers found out is a wrecked credit. A foreclosure damages a person’s credit score and remains on a credit report up to seven years. The taxes on your property are still due. Even though the Mortgage Forgiveness Debt Relief Act of 2007 offers protection from federal taxes after foreclosure through 2012, state taxes still may be due on unpaid debt.
Deficiency judgment is also another danger of walking away from a mortgage. A lender can pursue the remaining debt from an unpaid loan by getting a deficiency judgment against the borrower or may work with a collection agency to recoup losses.
Walking away from a mortgage is less risky in some sates than other. Nonrecourse laws protect individuals in certain states. According to research from the Federal Reserve Bank of Atlanta, the 11 nonrecourse states include Alaska, Arizona, California, Iowa, Minnesota, Montana, north Carolina, North Dakota, Oregon, Washington and Wisconsin. In these states, the lender can take the home through a foreclosure but doesn’t have the right to any other borrower assets.
If you’re being foreclosed on and need to move out, don’t forget to reach out the local Birmingham movers. We’ll help you with your move by assembling and disassembling your furniture, quilt-pad wrap your delicate furniture, and carefully move your heavy moving boxes. The Birmingham movers are part of a big network of qualified and reliable movers called All My Sons moving and Storage. The moving company is family-owned but locally operated. All My Sons of Birmingham is also licensed and insured unlike some of the other moving companies operating out there. Check out some of our other moving articles to get tips on moving and packing.