Home Value Less Than What I Owe

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I owe $750,000 on a house that is now worth $300,000. What can I do?


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Wow! You have a few options.

You can default on your loan and lose title to the property, essentially walking away from the loan and the property itself. This would be handled by either notifying the lender of your intentions, and leaving the home by an agreed upon date, usually referred to as deed in lieu of foreclosure, or by going through a foreclosure process.

Another option, although a long shot, would be to contact your lender to see if there is any chance of modifying the existing loan to reduce the amount owed substantially, which would require the lender to write off or “forgive” a large protion of what is owed.

If you truly love the home, have plenty of money and / or believe that the value may return someday, you could stay and continue to make payments on your loan and maintain good a credit rating.

You may also look into how exactly you came to be in such a scenario in the first place. Is there a possibility you are a victim of fraud in some way? How did you buy the home, how long ago, and with what kind of financing? Was the appraisal an inflated appraisal? A loss of such great magnitude underscores the need to delve further into the circumstances surrounding your loan. I would ask a mortgage professional (or a few) & or consult with an attorney to ascertain any wrong doing. If you think that somehow you were duped by a scam, then you may have legal recourse.

Answered about 6 years ago
Jeff Coon
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