I’m in a situation where my home lost $150K in value in one year (2007). I have an upside down loan… I owe $80k more than it’s worth. The loan is a 5 year fixed loan which adjusts in 2 yrs. My property tax bill is enormous ($5,500) and I can’t pay. My Home Insurance is $1600… and can’t pay that either. I can afford the mortgage for now however… question is, what will happen if I don’t pay the taxes and insurance and just keep paying the mortgage? Will the bank try to foreclose? What is the most likely thing that will happen?
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Did your income drop over this same period? If not, you should have no trouble making payments. You lender can foreclose if you fail to maintain insurance or pay property taxes. Pay up or give up.
If you think your mortgage payment is high now, it will go HIGHER if you don’t pay your insurance premium b/c the insurance company will notify the lender, and the lender will send you a nasty letter stating that they will place lender-originated insurance on the property in lieu of the HOI that you stopped paying….that can run between $3,000 and $4,000 a year.
If you stop paying your property taxes, they will place a lien against your property and that will start gaining interest..if the bank elects to pay them, they will tack that onto your mortgage payment and can FORCE you to start escrowing.
You signed a document at closing agreeing to that.
Get a second job if you have to.
A lien will be filed against the property for the taxes you owe and most places will put your name in the local news paper. My guess is the bank had a requirement that you keep the property insured to protect their collateral. If you let the insurance lapse they could foreclose because you would be in technical default of the loan. Your best bet is to go in and talk to the bank. You may be able to work something out where you can pay insurance and get them money.
I believe that if you have a mortgage on your house, you are REQUIRED to have insurance. If not, you are in default on your loan and they can foreclose.
Also, if you don’t pay your property taxes, they will put a lean on your house.
Sounds like you need some help. You need to talk to someone about adjusting payments or filing for bankruptcy. Debts you can’t pay only get worse (interest, penalties, etc.).
possibly a sheriff’s sale – they are the ones who come after you if you don’t pay your taxes and what type of insurance are you talking about PMI or homeowners? If PMI – the bank won;t let you NOT pay it – If homeowners – the bank may not let you NOT pay it or do you want the risk of something happening to your house with no insurance – then you’d really be screwed
Your home can be taken away because of unpaid taxes.
So, the house has dropped in value. Pay your mortgage and wait for the market to return. It will. Besides, you need a place to live anyway.
Why can’t you pay? Get another job or rent the house out. You can’t just walk away.
If you stop paying your taxes, the gvpt will “take” the house.
If you stop paying your insurance, you are asking for trouble in case of fire, injury, etc. If you are escrowing your taxes and insurance with the lender. The lender WILL buy insurance for you and it will be 3-5 times MORE expensive then you pay now. This WAS explained to you at settlement and is in the paperwork.