You might have tried this: you contacted your lender and asked them to lower your mortgage payment without getting a new loan.

But they said no. Or you couldn't get through. Or you weren't persistent enough (it takes a lot of persistence.)

Or perhaps you just can't afford to live where you are living and are "under water" — you owe more than your house is worth.

So you are tempted to just leave — and you want to know how to walk away from your mortgage.

Of course there are a number of repercussions to walking away from a mortgage. The lender will foreclose and this costs them money. So they will tack on the amount of their financial losses including these foreclosure costs to what you owe them.

In some states they cannot go after you for the deficiency judgment and in other states they can. For instance, in California, if you refinanced in theory they can come after you for the deficiency judgment meaning for their financial losses. But they must pursue foreclosure judicially rather than through a private trustee sale. And most don't.

The other repercussion is if you have a second mortgage. The second mortgage holder may not foreclose. They may do nothing. And if you walk away they can sue you for the entire amount you owe. There is no rule that requires them to just walk away and get wiped out. They can sue for breach of contract in many states provided they do not exercise their foreclosure rights already — and most do not.

So rather than walk away I recommend you pursue a short sale. This gets the problem off the lender's plate. You are selling the house and the lender gets the proceeds. They still are out some money but they don't end up with your house back.

Watch This Video on Short Sales Now

.

Sign up below with your email and name and see the video immediately 

See how to walk away from your mortgage the right way, how to sell your house even when there are no buyers, and how to deal with credit card debt. All the information is geared towards helping you increase your credit score and cut your debts. I even discuss how to buy a house with no money and no credit. I never share your information with anyone, and you can unsubscribe at any time.