How to Walk Away From Your Home
Guest: Jon Maddux
If you are one of the millions of Americans who are underwater on your home, you may be wondering if you can - or should - walk away from your home. Jon Maddux, founder of YouWalkAway.com joins me to explain what it means to walk away from your home and what you need to know if you are considering this option. This episode aired live October 6, 2012.
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Excerpt from this interviewGerri:
Joining me now is an expert who I have interviewed for my series on Credit.com about your options if you're underwater on your mortgage. And his work has gotten a lot of attention from not just the national media, he’s been on 60 Minutes, Good Morning America, New York Times, Wall Street Journal - all that stuff, but also from homeowners because so many Americans right now are still struggling with their mortgages. We hear this good news about the housing market, we hear it’s starting to recover and folks are saying, you know what it’s not recovering for me. What can I do?
So, joining me is Jon Maddux, he is the CEO and Cofounder of a website called youwalkaway.com, a website that helps homeowners understand their rights. So Jon, I know you you have been extremely busy over the past five years, so let’s just get a little perspective before we get into some specifics about consumers options here. Tell me what kind of trend you’ve seen over the past five years as homeowners have struggled with this problem.Jon:
Thanks for having me on, Gerri. It’s a pleasure. Definitely there’s been a trend - the trend that I've seen being on the frontlines with thousands and thousands of homeowners that call in is primarily it started in 2008 where it really was a shock. We all knew this was a shock because it wasn’t necessarily something that we saw coming. But not the majority out there, I know there’s a lot who saw it coming but majority of us who bought a home or got a mortgage to pay bills or whatever it was, that shock caused in the beginning a lot of emotion.
And over the years, it’s really changed in the fact that now people start to look at this as more of an emotionless transaction. They are starting to look at it like black and white. Does this make financial sense for me to do? I keep putting this good money towards bad every month when I don’t see an end in sight. I don’t see my value coming back up to a breakeven point even for quite sometime. So what do I do? Do I cut my losses or what are my consequences? So the trend has really gone from being very emotional about this to a point of I understand the situation now, I’ve got to do something about it and take action. And that’s really what we’ve seen.Gerri:
And so my sense is Jon, there are a lot of folks who, at least from the mail that I get, that there are a lot of folks who have been trying to do everything they can to keep their home. They’ve been trying to get a loan modification, trying to talk to their lender, trying to refinance, trying to take advantage of HARP 2, and nothing’s working. And so they’re finally reaching that point where they’re saying, I’ve done everything I can and now I just have to do something. Is that what you're saying as well?Jon:
Yes, absolutely. I think you have definitely people in different walks of life and a lot of people who are suffering out there who really want to keep the house and they have emotion vested interest in the house. That’s been the house that they’ve lived in, they raised their kids there and they want to keep it at all cost. The problem is that there was a bubble and no one can argue about that. There was this false price of real estate that popped and so there’s definitely this heavy weight on people as to what do but the lenders aren’t going to cut principal. What you’re starting to see is that they are starting to do that, case by case basis. But if you can’t hold on and they’re not going to cut your principal then really you’re in a tough decision point at that time.
Listen to the podcast to hear the rest of Jon’s advice for homeowners who want to walk away from their homes and want to understand what’s involved.
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