----- Original Message ----- From: "Julia Thompson" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, January 01, 2003 2:53 PM Subject: Re: OT: mortgage default question
> Erik Reuter wrote: > > > So, I have two related questions. > > > > 1) If you have mortgage insurance and negative equity, and you default > > on your mortgage, what are the typical consequences? Can you get > > off scot-free? If you have money, are you likely to get sued by > > someone? Will your credit record be ruined? > > Your credit record will take a big hit, at least. And you'll get kicked > out of the house, if you're living in it. So you'll be kicked out and > have a sucky enough credit rating that nobody will let you get another > mortgage for a long time, and you'll be forced to rent for quite awhile. That wasn't true in Houston in the mid-80s. We have friends who were in the position. Their dream house could be purchased for less than they paid for a much smaller house. So, they set it up so they rented out their old house, bought a new house, and then stopped paying the mortgage on the old house, while taking in the incoming rent. There were so many forclosures in Houston during that time that their lawyer told them that 1) No one was ever prosecuted for this 2) Their credit rating would suffer a minimal practical hit, as long as they had good credit other than the forclosure. Since the US government picked up the tab, no one minded. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
