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  1. #1
    Join Date
    Nov 2011
    Posts
    2

    Default What are the Consequences of Walking Away from a Mobile Home Loan

    My question involves a mortgage (personal loan?) in the state of: Maine

    I bought my mobile in a Maine park back in 2006 before I married my husband for way too much $ since the market was high. I have been trying to sell for 3+ years and @ the current price am standing to lose $10k. They are telling me I need to lower it another $10k for it to sell, and I am wondering if it is financially stupid to pay the bank $20k to leave a home that isn't worth much more than that. The mobile is in Maine, but the financing bank is out of Ma., so I am assuming the laws in Maine would apply here, but wasn't 100%? I have tried to rent it, but the park owner will not allow it, so therefore I was pondering turning it in to the bank.
    I have a good job and a little over $100k in savings, so bankruptcy is not an option. I plan on buying another home and was thinking of using most of my savings for a down payment before turning it in (if I decide to do so). My question is: what are the possible consequences of walking away? It will be a repo., not a foreclosure because I have a title, not a deed, and I do not own the land, correct? I know Maine is a deficiency judgement state, and have heard varying stories of how aggressive banks are and aren't with these judgements. What do they usually do with these judgements?
    I know my credit is going to suffer, but beyond that, will they most likely lien my new home, call my employer/garnish wages, attach bank accounts, etc.? Or will they not persue the judgement at all? Would it be better to put my money in my husband's name (since he is not on the mobile's title?) and not put it into a new home, so it has no equity in case of a possible lien? I have struggled with this and hate the idea of walking away from anything since I have always paid my bills, but I also don't want to be giving $20k to the bank and waiting another 2+ years to sell the place as I want to buy a new home while rates are low. Any help would be greatly appreciated.....

  2. #2
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Mobile Home Underwater Wont Sell Low Price Want to Know Consequences of Walking A

    Knowing you have the assets to pay, they will likely trash your credit and take their money through the courts. In addition to the money you already owe, you will additionally pay thousands in extra interest and legal fees. Good luck with that.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: What are the Consequences of Walking Away from a Mobile Home Loan

    It sounds like your financing with the lender is more along the lines of a car loan than a mortgage, given that you are renting the lot. That would make it a lot easier for your lender to pursue you for a deficiency. You should expect that if the bank sells the home and pursues the deficiency, they will get a lot less than your present anticipated offer - the home will likely be sold "as is", perhaps after a period of neglect, most likely with all utilities off such that the buyer doesn't know if they work, and will likely be sold at a rock bottom price. If the lender knows or determines that you have $100K available to pursue, I would expect it to actively pursue collection of a deficiency judgment via garnishment of your savings.

    Defaulting on a loan will devastate your credit record, and you can expect that you will have difficulty finding an affordable mortgage after you default.

  4. #4
    Join Date
    Feb 2010
    Location
    CT & IL
    Posts
    5,273

    Default Re: What are the Consequences of Walking Away from a Mobile Home Loan

    To see what happens in your area to loan defaults, take a trip down to the courthouse and look at the files of similar cases. There are likely hundreds of them because people think they can just walk away from a loan. Not all home purchases are going to make you money. If its only 20K difference I would sell and pay the 20K to the bank. Its a capitol loss.

  5. #5
    Join Date
    Nov 2011
    Posts
    2

    Default Re: What are the Consequences of Walking Away from a Mobile Home Loan

    Thanks for the response, I appreciate it. So if I am unable to sell (even at a significant loss, for whatever reason), what is the best strategy for walking away from the mobile? Should I put my savings in my husband's name alone considering he is not on the mobile's title and I got it before we were married? And as far as credit goes, I am going to purchase another home before I ever walk, so I will not need my credit again for several years as we already have a car loan as well so I will not need it for an auto loan either...

  6. #6
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: What are the Consequences of Walking Away from a Mobile Home Loan

    You think you are going to walk away and you are not. Your best bet is to sell the home yourself and pay off the loan.

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