Posted on: 05th May, 2009 01:13 pm
I currently pay PMI insurance on my home. I have an excellent credit rating and I am not behind on any mortgage or other payments. I live in an area saturated with cheap foreclosures. I have to move quickly and although I do not owe more than what my house is worth, I unfortunately owe more than what I can get for it right now due to being surrounded by multitudes of underpriced foreclosures. I might be able to take a hardship withdrawal from my 401k to make up the difference but that is really going to cost me, the max I can take may or may not cover the difference. If my home will not sell and I just walk away, what happens since I pay PMI? Do I have any other options? I have to move and I need to do so quickly.
Thanks
Sherry
Thanks
Sherry
Probably yoru house will be forclosed and the the lender will get paid by the PMI.
Takign money out of 401k is not at all an option. You are loosing on your retirement and also you will pay penalty in addition to the taxes at your current or higher rate.
Takign money out of 401k is not at all an option. You are loosing on your retirement and also you will pay penalty in addition to the taxes at your current or higher rate.
Hi Sherry!
Welcome to forums!
If you just walk away from the property, the lender will foreclose it. The deficient amount resulting from the sale of the property will be recovered by the lender from the PMI.
As you want to move out from the property, you can apply for a short sale or a deed in lieu. However, you should note that both these options will affect your credit score and lower it by quite some points.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
If you just walk away from the property, the lender will foreclose it. The deficient amount resulting from the sale of the property will be recovered by the lender from the PMI.
As you want to move out from the property, you can apply for a short sale or a deed in lieu. However, you should note that both these options will affect your credit score and lower it by quite some points.
Feel free to ask if you have further queries.
Sussane
once you stop making payments the lender will foreclose. But this will take any where from 9 - 12 months before the foreclosure process completes.
So you do not need to be in a hurry to leave your house.
So you do not need to be in a hurry to leave your house.
Will the PMI carrier come after me or the mortgage company? I live in Michigan. I would rather pay out of my 401k now than have to take it out to pay them after after my credit has been destroyed.
I do not think they will go after any one.
You paid PMI for so mnay months or years, so that the lender is protected in situations like this. Now PMI is kind of insurance.
Just like your car insurance in a different forum. It is the responsibility of the company who is covering this PMI to pay the lender.
You paid PMI for so mnay months or years, so that the lender is protected in situations like this. Now PMI is kind of insurance.
Just like your car insurance in a different forum. It is the responsibility of the company who is covering this PMI to pay the lender.
Maybe I'm crazy, but I have a perfect credit score, I have made sound financial decisions. I have now lost all of the equity in my home, my 401k is demolished and I have to move because my job is gone here because of the recession. I feel like not only should my bank, (that received bailout funds and is in part responsible for this mess), help me out of this, but that I should be able to sue them for my losses.
I am not sureyou will be able to sue your bank. Thats a long shot.
But have you called your bank and asked them for a loan modification?
Since you lost your job your income is really impacted and they can seee that make some adjustments to your loan.
Probably you may need to write a hardship letter and you can find a sample letter on thsi forum.
But have you called your bank and asked them for a loan modification?
Since you lost your job your income is really impacted and they can seee that make some adjustments to your loan.
Probably you may need to write a hardship letter and you can find a sample letter on thsi forum.
sherry, i'm sorry to learn of your situation, but you must realize that the bank had nothing to do with your equity drying up. further, i would think they had nothing to do with your losing your job, either. suing sounds like a wonderful method to try to get back to whole, but it would be a frivolous thing to do.
i don't know if a modification would be beneficial to you or not, but you may want to go that route, as there wouldn't seem to be too much else you can do at this time, based on what you've mentioned.
i don't know if a modification would be beneficial to you or not, but you may want to go that route, as there wouldn't seem to be too much else you can do at this time, based on what you've mentioned.
Actually according to all of the experts out there my lender is one of the banks responsible for the economic meltdown, my lender is in the top 25 considered responsible for this whole mess. I just can't believe these banks get to stay in business and that nobody is going to jail. For those of us who did nothing wrong, well we have been robbed blind! I think they should be held accountable for the loss of the equity in my home now that I have to move. Were it not for this economic meltdown, I would not even need to move.
Sherry sorry that you are in the middle of this mess and you are correct to you did not create it.
Probably more poeple like you start writing to your congressman and ask them why these people are not in jail it may put some light on this situation.
Probably more poeple like you start writing to your congressman and ask them why these people are not in jail it may put some light on this situation.