Okay, so here is my story: I purchased my very humble home back in 2004 based on my then salary of approximately 50 thousand a year. I was laid off in ’09 and remained that way for 2 years. I finally found work and accepted a job that paid only $10 an hour. It was all I could find. I started back working in February of ’11 and the only way to make ends meet was for me to file exempt on my taxes. Of course that puts me in a hole with Uncle Sam because although he hasn’t said anything yet, he will surely come calling.
I bid 100k on the house, but I understood NOTHING about buying a house and even less about bidding on one. The comps (which I didn’t understand at the time) in the neighborhood were/are 75k and so my bid of 100k (stupid) was at least 35k more than what it should have been, making a short sale highly unlikely since I still owe 92k. I have since done a refi (’06) and a modification last year. The payment is still out of reach. I had hoped that I would find better employment by now but that hasn’t happened. I am still current but I cannot keep this up as I am digging a deeper and deeper hole for myself. Before I purchased my home I had a much smaller home, which I rented out when I moved in here. Now that my tenant is leaving, I am thinking very seriously about a strategic default here and simply move back into my smaller home that I CAN afford with my income………..but I am petrified of any action the bank may take. I realize that NC is a non-recourse state but after the refi and the modification, I am worried that the loan may have been changed to a recourse loan since I had NO idea what a recourse loan was until I happened upon this site.
I have heard all kinds of conflicting information about what I can do, should do, should not do and cannot do since I have begun researching my options, but the most consistent thing I have heard is “Consult an attorney”. So, I have called lawyers……and perhaps I am stating too much information to them because they never call back. I believe they want to represent me, but they don’t want to give any consultation. All I want to really know is, “Is it safe to walk away?” I’ll take the credit hit. I don’t expect I’ll buy another home any time soon. My children are adults and I am not married. I live alone. I owe 17k on the smaller home and the monthly mortgage is under $400 a month. I am 45 years old and I could actually start saving towards retirement instead of being broke after I’ve paid this one off at the age of 69. I know at least 3 people who have walked away, consequence free but they didn’t own another home.
So many people have told me that you can literally live in a house 1 to 3 years after you have stopped paying on it, but I have no desire or intent to squat. They can have it back. I am still current and I am willing to hand over the keys with the house in turnkey condition before the end of this year (2012). I just don’t want to have to endure any action from the bank such as a lien against the smaller home, or to garnish my wages, etc. It is a beautiful home, but it is beyond my current economic reality at this time.
So, strategic default or DIL? ANY answers would be appreciated immensely. I will check back every day for guidance. Thanks in advance.