Go Ahead, Foreclose Me, I’ve Already Bought a New House!

Here’s a new twist on surviving the foreclosure crisis. 

We’ve already heard about thousands of homeowners facing foreclosure who simply walk away from their properties and their mortgages, letting the lenders deal with the financial fallout.

Since they owe more than their houses are worth, their decisions to abandon their homes and their mortgages often make financial sense, especially if they are not too concerned about the hit to their credit scores.

Now some homeowners are combining that strategy with a new one. 

They are buying new homes before their old homes go into foreclosure, and then walking away from the old homes and the old mortgages.

What these homeowners hope to achieve is getting out of their current untenable mortgage situations with a new home and a new mortgage. 

And it appears that so long as the homeowners don’t mind seeing their credit scores tumble, this strategy will work.

The homeowners will need to come up with a  new lender and sizable down payment for the new home, but once they’re in, there is nothing that the old lender can do.

Since the new home, with the new mortgage, has no connection to the old home and the old lender, the old lender can not come after the new home to collect any debt owed on the old home.

What is also a sign of the times is that there are now realtors who specialize in helping homeowners pursue this strategy and lenders who also specialize in these situations.

Real estate is getting stranger and stranger. . .

One response to “Go Ahead, Foreclose Me, I’ve Already Bought a New House!

  1. Hello, I can’t believe that people are allowed to get away with this. It does make sense and all, but how this can be legal is besides me. They can’t be sued by the old mortgage company for the remaining money left over?

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