mortgage reduction or foreclosure?

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My house market value is 30k now,I still owe 50k in principal ,my interest is 4.99 ,I have been living in the same house for 12 years , my bank is Wellsfargo who’s refusing to participate in any mortgage program according to the Michiganhardesthit.gov including they are refusing to participate in the principal reduction program which I qualify for and is matched by the state of Michigan with equal amount .

I need a bigger house now that my family has grown,if I take another loan and buy a bigger house and walk away from the current one ,can I be sued by Wellsfargo for the principal and how does the city I live in know that this house has been foreclosed on so I won’t be responsible for any prop taxes from the date that I walk away ,thank you

2 Comments
  1. Reply
    someone
    May 2, 2011 at 7:15 am

    You do NOT qualify for a reduction since what you owe is Minimal. You can’t walk away since no other lender will give you a second mortgage and yes you will be sued. You still are responsible for Property taxes as long as your name is on the deed.

  2. Reply
    Simpson G
    May 2, 2011 at 7:44 am

    That website you gave doesn’t exist. And before I take the word of any website, I would FIND OUT FOR MYSELF what the current status of loan modifications are. You need to go to http://www.makinghomeaffordable.gov/pages/default.aspx , the official government website for the FEDERAL program, and start filling stuff out. Whatever website you saw may be correct, but they also may be incorrect. Wouldn’t you hate to lose the chance to modify or re-fi because you didn’t do the legwork yourself?

    If you walk away, you will not qualify for another mortgage for a considerable amount of time, usually 3 years minimum. Whether or not you can be sued depends on the type of loan you have (recourse or non-recourse). In a non-recourse loan situation where you fill all the requirements mandated by the IRS, your forgiven debt from the foreclosure will also be forgiven by the IRS. http://www.irs.gov/individuals/article/0,,id=179414,00.html

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