Should I walk away, short sale or wait out this market with an underwater mortgage in the 94561 zip. Down 100k after paying 240k

Asked by Drm, 94561 Sat Oct 1, 2011

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Thu Aug 15, 2013
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at You can check us out at I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
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John Arendsen, Agent, Leucadia, CA
Sun Oct 2, 2011
If you can wait it out please do so. As others have so aptly stated, you signed a contract and made a commitment. If you can afford it hang in there. I'm over 50% underwater and would never throw in the towel. However, if you have a legitimate hardship that's another story.

Maybe this link will help you through a more conscience decision.…
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Lauryn Eadie, Agent, Reston, VA
Sun Oct 2, 2011
If every one in the country walked away from a home that was under water, then we would be in an even worse mess than we are now! You agreed to the price of that home when you purchased it. Yes you assumed that you would gain equity over the years. And you still might. Real estate is a long term investment. If you can still make your payments, whether you want to or not, than you should consider staying in the home.

You have a contractual obligation with the bank to pay your mortgage. You were okay with that a few years ago, it shouldn't change now. Trust me when I say I am in your same boat, I bought my house in 2006, along with the rest of my neighbors in a new development. We are all under water, but if we all walked away, then what would happen!?

Try talking to your bank and see if you can get a principle reduction. This might help you feel more at ease. If you are financially qualified to pay your mortgage and do not have a legitimate hardship then they might not be willing to reduce your principle. But you could also ask them about a loan modification to reduce your interest rate, which is likely higher than current market rate.

If you are not in a financial hardship, then you will likely not qualify for a short sale, and walking away should not be even part of the mix unless you have no money and the bank refuses a short sale.

Hang in there and if you need to move prior to your equity rising, talk to your tax accountant about renting the home as an investment property.

We all need to take a little bit of responsibility if we ever want our economy to move forward.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Sat Oct 1, 2011
You didn't say what your hardship is other than your mortgage is underwater

Can you still make the payment?
Is your income the same? (i.e, you didn't lose your job, your income did not decrease)
Are you and your family intact (i.e., no divorce, no separation, no death, no illness)
Are you staying put (i.e., you're not being relocated)
Are you comfortable in your home --- is it the same as what attracted you to buy it in the first place?

If so..what is the hardship?

Just because you're underwater doesn't mean you're in trouble. Many of us bought at the peak of the market. But we're staying put. We love our homes. We're comfortable where we are. We lose if we sell now. The market will rebound. We may not sell EVEN when it does.

If you walk away, you'd still need to find a home to live you'll pay rent. In some cases, rents have gone up, too...and in many cases, it's still better to own rather than rent. You walk away now, you lose everything.
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Paul DeMaria, Agent, Oakley, CA
Sat Oct 1, 2011
The last option should be walking away. The ramifications are many and none are good. You should start with a loan modification. Don't make the assumption that your lender is on your side, they are not. A good place to start is to get information on the best way to do a loan modification go to, you will be able to read some posts which might help you. Also, I'm part of the US Housing Center and there you can get free information, reports and forms so you have the best chance of getting your modification approved. give me a call and will give you access to their site. If your sure you don't want to try a modification, you then try to short sale the home. visit There you will get helpful information on short sales. good luck
0 votes
Neil Case, Agent, Martinez, CA
Sat Oct 1, 2011
Unless you have a burning desire or strong reason to live in a different community such as closer to the Bay or something like that, then I doubt you could rent as good of a property for what your note payments are on $240k. So where else would you go? Don't focus on how upside down you are unless there is a significantly better housing option for you. Believe it or not $100k is not that much compared to others. And I very much believe that once this market turns around there will be strong momentum upward in the 3rd or 4th year of recovery and you are likely to gain much of that back again. Then there are the tax benefits, the credit benefits and the pride of owning and being able to do what you want with the place. On the other hand if you were $300k upside down I might have a different answer. If your only reason for considering walking away is financial I say you would be better served to dig in and weather the storm.
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Sat Oct 1, 2011

I would never recommend walking away as it shows future lenders that you are not a responsible person. I would try to do a loan modification, please do not pay someone outrageous fees to do that for you..I can assist you for free. If the loan modification does not work, you should do a short sale. With a short sale, you can buy a home again in 2 years...with a foreclosure it can take up to 7 to 10 years. Please feel free to call or email me if you need further assistance. 510 932 1066
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