One thing that puzzles me… if you are going to walk away for sure once the reset occurs, then why are you going to continue to pay on the loan at all? Basically you are saying that you are going to pay 15 months worth of mortgage payments, HOA and property taxes fully knowing that you will eventually default.
I don’t mean to come down hard and I am one who has always been in favor of the morality of living up to the debt that you saddle yourself with. However, if you toss morality aside and attack the problem from a PURE logic perspective, then your choice of allowing a foreclosure to happen later yet feed the kitty for another 15 months is illogical. Perhaps I am incorrect but taking the bad medicine now allows the following:
– You can start to save money for your next home in a few years.
– You can start to rebuild your credit.
– You will not be saddled with your mortgage payment, HOA and property taxes.
– When you do move, save the difference in your (what I assume to be lower rent) new found savings, don’t blow it on toys.
Now with regards to your taxes, don’t trust what credit counselors tell you. Go to a CPA and ask them. If you want (which you will need) advice on how to rebuild your credit then talk to a credit counselor. If you want to learn about how to walk away from your home then yes go to the website that was mentioned above.
Also what has not been mentioned is that you can think about negotiating with your lender. You can simply tell them what is going to happen, and that you would be more then happy to work something out with them. Let them eat 100k and see if they will lock you into a fixed rate. Additionally you may want to call HOPE and see what they can offer for you as well. Finally, when Obama becomes president he will more then likely champion further legislation sponsored by guys like Schumer, Dodd and the rest of the Countrywide sponsered crew to help out lenders in the guise of helping out homeowners. Seriously there may be programs that can help you.
So I think there may be alot of alternatives, none of them great, but again, I believe if you are going to bail, I would think about getting it underway sooner rather then later.
