Mortgage: What to do?

[BubbaGumpShrimp]

The house is in my name. I purchased it prior to our marriage (11 months in duration prior to my separating and leaving). I had to leave town, as there was no way that I was going to get NJ and her kids to leave the house.

The $h1tty part...even if I (or my lawyer) convince her to vacate, there's still the matter of her and her entire family living right around town. In a nutshell...I have no intention of staying in that house post divorce (I'm staying with family 500 miles away at the moment).

She is a complete NJ. If I moved back into that house post divorce, it would only be a matter of time until her or one of her "agents" dropped by to pay me a visit. Yeah...I know..."just call the police," but I have no intention of trying to move on with my life with that over my head. Yeah...I'd get a protective order, but I was pretty much laughed at by the magistrate when I tried to get one prior to leaving town.

After talking with the mortgage company, on the advice of my attorney, I was given essentially one option. List the house (again...not possible while NJ is in it). They may approve a short sale (underwater). After 90 days...the mortgage company may approve a deed in liew of foreclosure. In a nutshell...my best (least $h1tty) option is to just "walk away" from the mortgage and stop paying (yeah...I'm currently paying for the house, lol.).

There's really no reason, as I see it (I've bounced this off my attorney and parents) to continue paying the loan and shoot for a short sale. Even a short sale is going to destroy my credit.

I've always had good credit, so I'm not looking forward to this. Has anyone else been down this road? The mortgage company apparently uses a "means" test to determine if they're going to approve a short sale or deed in liew of foreclosure. I'm not going to pass that (they'll say "you can afford to make the payment").

Has anyone else been down this road? Would filing for bankruptcy be an option? I would appreciate any input, other than "sucks to be you," "you should have just booted her and her kids out," etc.

[Fatheroffour]

Quit paying. Bank the money.
After a couple of months send some official looking foreclosure notices to yourself at that address.
Not long after send some official looking eviction notice to yourself at that address.

Assuming she will open your mail, she might move out on your own and you can pick up the pieces as you see fit. Plus, you wont get in any trouble for faking letters to yourself.


Possible?

Who knows? But its within the realm of possibility.

[Anything4Her]

After a couple of months send some official looking foreclosure notices to yourself at that address.
Not long after send some official looking eviction notice to yourself at that address.

I like this.

[blueTexas]

Not to worry so much about your dropped credit rating.
In a marital dispute, I stopped payments on a cheap house, and it was repossessed. I didn't declare bankruptcy.
8 years later, it had dropped off my credit report and I took out a mortgage on another and better house. It's entirely in my name.
FOF's suggestion is appealing. An alternative is to to continue making the payments as you are doing now.
Use Fedex or UPS to avoid having the post office check for change-of-addresses on your name.

[BubbaGumpShrimp]

Quit paying. Bank the money.
After a couple of months send some official looking foreclosure notices to yourself at that address.
Not long after send some official looking eviction notice to yourself at that address.

Assuming she will open your mail, she might move out on your own and you can pick up the pieces as you see fit. Plus, you wont get in any trouble for faking letters to yourself.


Possible?

Who knows? But its within the realm of possibility.

Yup. That's the plan that I'll put into action on 7/15. The current pipe dream is to bank up everything I can for 6-8 months and go buy a travel trailer (x < $15k). Yeah...not an optimum living arrangement, but if I can pay for one in cash...it'll permit me to continue to pay off other debt and set me up to get back into a house in a few years.

That's a good idea. The lawyer just sent off a follow-up to my PSA. The PSA was nice/cuddly. This was a bit more...to the point. It spelled out that I'm only carrying things till 7/15 (including the utilities). I'm doing that just to CYA. She can't say that I abandoned her if I paid 100% of her living expenses for three months. That's pretty damn reasonable also, given the short duration fo the marriage. If she didn't have kids...I'd have just boxed her < edited > up, changed the locks, and left her stuff on the porch. Ah...to be burdoned with a conscience, lol.

Not to worry so much about your dropped credit rating.
In a marital dispute, I stopped payments on a cheap house, and it was repossessed. I didn't declare bankruptcy.
8 years later, it had dropped off my credit report and I took out a mortgage on another and better house. It's entirely in my name.
FOF's suggestion is appealing. An alternative is to to continue making the payments as you are doing now.
Use Fedex or UPS to avoid having the post office check for change-of-addresses on your name.

Did the bank ever come after you for anything? How long did it take them to act? That would be the only reason I would file bankruptcy...to keep them from attempting to seize other assets down the line.

[BubbaGumpShrimp]

Still curious....for anyone that's done this...how long did it take for the bank to start making an issue out of the non-payment? Did they ever attempt to garnish your wages? Any other insights?

[Fatheroffour]

It's been over 2 years and still waiting for the shoe to drop.

[blueTexas]

In my case, I had a VA-guaranteed mortgage here in Texas. The VA did ask me to pay them back, and we settled the debt a few years later.

[BubbaGumpShrimp]

It's been over 2 years and still waiting for the shoe to drop.

Thanks. Yeah...I can't imagine that I'd hear much out of them before six months (other than "pay us" nasty-grams).

I received the package from the mortgage company that I requested (on the advice of my attorney). It's amusing...the package...as well as the person I spoke with on the phone essentially said "stop paying the mortgage." Well...I can take a hint.

Every one of their homeowner assistance steps only cater to people that have already missed payments. Someone like me that calls up and says "I've never missed a payment...but I'm going to have an issue in 90 days" is essentially ignored.

I just find it hard to believe (granted I tend to be too logical) that they don't make an attempt to garnish wages to collect their money.

In my case, I had a VA-guaranteed mortgage here in Texas. The VA did ask me to pay them back, and we settled the debt a few years later.

My loan is VA-backed as well. If you don't mind my asking...what percentage of it did they ask for? We're talking about $230k (for me). Any percentage will be a good chunk of change.

[Trevor]

In some other posts I got the idea that lots of banks are simply saving the REO expenses by allowing the home(owner?) to stay in the house and maintain it for them.

When a borrower failes to pay a mortgage as agreed, it costs the lender money every month to...
a) keep the property in shape for potential sale; the yard clipped, the pool clear, the windows clean, etc.
b) pay lawyers to follow the exact steps to foreclose or finance people to reconstruct the loan according to bank and regulatory requirement
c) pay collectors to attempt to squeeze blood out of rocks
d) continue servicing the loan without receiving payments
e) losing the use of their capital elsewhere while not being paid for its present use (i.e., no interest being paid on the principal)

So they hold off spending on items a, b, and c while they suffer only d and e, for the time being. Sounds like a defensive strategy until the market shapes up a bit. am not a finance guy but looking at it this way makes some short-term sense. Except for the REO brokers and their suppliers.