Avoid Mortgage Modification Scams
If you are considering a mortgage modification, you should be aware of the various scams that are going on out 
there. The vultures are literally circling over your home waiting for you to make a move.
The scammers are very deceptive often presenting themselves as representatives of the Obama Administration. They send official looking documents which lead you to believe that they are legitimate, but they are not.
If a loan modification company asks for big up front fees or any fees up front for that matter, run don’t walk away.
You can read more about these scammers here.
Should You Foreclose On Your Mortgage?
Should You Foreclose And Walk Away From Your Home Mortgage?
For many Americans the answer to that questions is “I have no choice.” But for a lot of other people, the it is a lot harder to answer. You may just barely be able to pay your loan, but you are not able to sell your house because you have lost equity and can not sell it and the bank is unwilling to do a loan modification. You may find that your you owe so much more than your house will ever be worth again that you may as well walk away from your mortgage now.
Here Are Some Costs of Walking Away From Your Mortgage.
You may struggle internally with the thought of not living up to your obligations. For some people this is a serious issue that will haunt them for a long time. For others, not so much.
Your Credit Score Will Take A Serious Hit.
The damage done to your credit report by a foreclosure is bad. Your FICO Score can literally drop hundreds of points. The foreclosure will remain on your credit report for up to seven years or more, making it virtually impossible to get another home mortgage during that period..
Also, let us remember that now, not only do mortgage companies look at your credit report, but so does insurance companies and many potential employers as well. The stigma attached to a foreclosure is minimized a bit though because of what is going on in the economy . So possible employers may not take as hard a look at that as they once would have.
Added Tax Burden When You Foreclose.
Typically, under tax code you are responsible to pay income tax on any amount of money which has been forgiven by a lender, There is a new law however that minimizes such a burden for primary residences. You should definitely consult the advice of an accountant and an attorney regarding these issues.
Also in some states, banks may be able to come after you for the money you owe them. They do not usually do this, but it may become more commonplace as the financial crisis deepens.
So Where Do You Live After You Give Up Your Home?
Typically, unless you move in with friends or relatives, you will have to find a rental unit to live in. When you start looking for rents, you may find that in the end it is not really much cheaper than owning. As the demand for rental units climbs, so does the amount charged. You could find yourself struggling just as much to meet a rental payment as you would a mortgage payment.
So therefore, the answer is there is no easy answer. Walking away from your home may have benefits for you, but it also comes with a steep price.
