the davis family

It's ok, my fault for hijacking the thread, sorry to the OP

pricklykina

Sticks neck out
This is totally unsubstantiated but still...I thought that Home loans in the US were non recursive so that people could hand the keys in and walk away from the debt. Unlike other countries where people are still liable for any shortfall. Isn't this what caused all the problem with home loans / recession this time around?

lisag8070

this is true in some states, not all..

charleygirl

Oh okay, I do know of a couple of people who have done this, some here in NH and I was pretty sure they did not have a problem buying another home

So yes a state thing then.

Giantaxe

It's even more complicated than that... in some states, loans are only non-recourse (meaning they have no recourse other than taking the house) on "purchase" loans. If you've refinanced, you may have unknowingly converted from a non-recourse to a recourse loan.

Here's some state by state information:

http://www.helocbasics.com/list-of-n...ency-statutes/

Cape Blue

I know some people who moved back to the UK whose US mortgage was underwater - they appeared to have have agreed with the bank a short-sale whereby the bank is going to eat the loss.

I think the fact that they were leaving the country helped persuade the bank to agree to the short-sale.

I think it still has some negative on your credit report but not as much as a foreclosure.

http://en.wikipedia.org/wiki/Short_sale_(real_estate)
http://www.housingwatch.com/2010/03/...st-from-obama/
http://www.huffingtonpost.com/2010/0..._n_526701.html

lisag8070

oh yes I agree, this is especially true in North Carolina, but with each state having different laws about this, (and me having no idea which state the OP was relating to) I left it open as anybody who is thinking of going down this route really really needs to read and understand the laws from their own state..

great link by the way..

callowman

I have no experience but in theory, if you walk away from the house and back to the UK I doubt it will affect you at all
1: you DONT use US SS numbers there
2: you dont use US credit agencies
3: the only people that DO come after you in a foreign country is the IRS (figures) !! so if your ok with your taxes i dont see how they would find you if you moved back and vanished....
and the IRS wont come after for a couple hundred bucks, it would have to be thousands,...

britmomma

Collowman is right. We purchased a home in the UK about 4 years ago although we have always maintained a UK bank account. We got a crap loan as non-res. but we got one. They did not ask for one single bit of US information not even a tax return. Only used our former payment history with Halifax. I'm in the real estate biz here in the Shady State and the mortgage industry does not use any international credit checks at all, ever on residential purchases.

But...........file bankruptcy and get a judgement order they can pursue you for the debt. In Florida it is for 20 years and this varies from state to state. Sell on a short sale and negotiate the judgement off the sale and the bank will issue you with a 1099 and the IRS will be looking for you. Either way you will be back in the UK having your first decent pint in years so let 'em look for you!

Pauljarv

Thanks for all the responses. Will check if we have a non-recourse loan, we had another loan for some of the repairs but hopefully it's non-recourse type as it was only a fraction of the mortgage, not strictly a re-fi.

Will also look into short sales. Thanks again to all.

MaineLeedsbloke

First of all, after looking into this recently, I am pretty sure now that when you return to the UK, your US nightmare will not affect you because the British banks will not check foreign credit. However your UK credit history will be blank if it has been longer than 7 years since you had any UK credit activity, which will prevent you from buying a house for a few years as some lenders consider someone with no credit history worse than someone with bad credit history. As for your US house, I would go for broke and try and do a "Short Sale" where you get the bank to accept whatever you can sell it for. It is in their interest to do this as foreclosure tends to be more expensive for banks. A friend of mine had to do this a couple of years ago........he got the bank to agree to sell the house for about $50,000 less than the mortgage. By doing this, he was released from any debt connected to the house and his credit didn't take as hard a hit had he just let the house go to foreclosure. The only downside is the IRS, which can come after you for the "forgiven" debt as they treat it as income............but I do remember my friend bringing this up but at the time Congress did pass some sort of law where people could do short sales without tax consequences for a limited time which he was lucky to take advantage of. I wish you the best of luck

dunroving

This is not entirely true - there have been lots of examples on this forum (including myself) who got mortgages despite having been out of the country (for 23 years in my case).