I bought a house with 20% down and during the housing upturn I took out an equity line of credit. As you know about the housing market today, I actually owed much more than it's worth. Even the 1st loan is in a negative territory and on top of this I also owed my 2nd loan (equity line of credit). It comes to the point now that it's difficult if not impossible for me to keep up with the payment and I am thinking about walking away from it.
I'm worry about not just my credit but also what can these two lenders do to me if in the future I can afford to buy another house? Can they really go after me for as long as they wish, especially the 2nd loan? Would they ever forgive me for walking away because I can no longer afford? Please let me know as much detail as you can; I really appreciate all your help. --Vince
I'd like to suggest an alternative plan, Vince. First I'd like you to contact CCCS of Metro Atlanta. It doesn't matter where you live, just call them. They do more "foreclosure avoidance" counseling than any organization in the country. They may be able to help you to rework your loan so that you can keep making payments and save your credit. If they can't help you then you can't just walk away. You have to make an effort to short-sell the house. You'll need to contact your first lien holder (the company you owe the larger balance) and tell them exactly what you just told us; having trouble with payments, want to do the right thing, thinking of a short sale. This gets them involved in the process and they'll tell you what they'll take so your agent can market the property. Unfortunately the second lien holder (the company you owe the smaller amount) will likely get nothing out of short sale.