Hello All, I happened upon this website today while searching for as much info as I could on the subject of walking away from a home. Obviously, like most people on here, my biggest concern is the bank "coming after us" after the foreclosure. I'm hoping to explain my situation and get some knowledge from the forum about whether my wife and I should consult a lawyer, CPA or just let the process play out as others have seemed to have done.
Bought the current home in 2005, paid $180K and got an interest only, fixed rate loan for the first 10 years. Because of this, we still owe $175K on it. Our home value increased to as much as 225K but has dropped below 100K and has been around 97K for the past year or so. We've never missed a payment on anything and both of our credit reports are around 800. I have attempted multiple times to get refinanced but have not been able to because being so far underwater and being current. SO...we got fed up with basically throwing away thousands of dollars that we'll never see again (80K+ in interest over the 7 years) and decided we'd look into strategic default...which I have to say is something I never thought I'd think about. We were able to qualify and purchase another, much nicer and much larger home for MUCH lower than our first home. Now we have both houses, we were hoping to rent the first home, but have had no luck. I refuse to waste more and more money on the house and will miss my first payment in December (while keeping the new house and cars current obviously). We are terrified of the bank coming after us for the difference once it sells however after reading some people's posts who are also in GA, I feel somewhat better. But, I do have some questions that weren't asked in the other threads about foreclosures in GA.
1) Will the bank be able to come after my new home in any way, shape, or form?
2) It seems 401K's are safe from what I've read (correct?) but what about college funds or something like that which are simply in savings accounts?
3) I know of the Tax relief law that is until the end of 2012, I would assume 13 months would be enough time to complete the process...or say its Nov 2012, would the banks purposefully try to mess with people and postpone sale until 2013? Would there be anything in it for the banks to do that?
4) I hear the banks don't really like to come after people who have shown they can't make payments which means they don't have anything for them to get in the first place...but, people who have shown the ability to pay may be more likely for them to try and recoup the difference? We make good money and have some savings (although the vast majority has gone to refurbishing our newly purchased, previously foreclosed house), are we a prime target to come after?
5) If the worst happens and there is a deficiency judgement, I'm assuming there are ways to negotiate the final amount due and/or other options?
I feel relieved to start the process, this burden has weighed heavy on me, knowing I'm throwing money out the window for the simple reason of keeping a good credit score. I've made peace that this is a business decision, not a moral obligation. Any assistance, tips or comments would be welcome!