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Author: Cradix Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127815  
Subject: Thinking about voluntarily giving up home... Date: 4/24/2006 10:41 PM
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Where to begin? We bought a double-wide mobile home (on *leased* land) in 2002 against the advice of a few people. Regardless, we have been trying to sell it for the past year for $39,999 (we owe $44k). A lot of people are interested, but none want to pay what we need, of course.

We've looked into moving the home to land, but several factors make that less than desirable. We've also looked into renting it out, but it would take $1000 a month in rent just to cover our expenses, which is way above market for our area. (Plus, the thought of someone else tearing up our home, not paying on time, etc, sort of scares us). Basically, I believe we're stuck.

As for the finances of things, we can afford to keep paying on this home, we just don't think it is worth it in the long run and we would not be able to reach our financial goals if we did. Our most recent plan was to save up enough money ($20k, maybe) so that we could sell it at a deep discount, but by the time we actually saved up that much money, the home would be worth even less and we'd still walk away from the home with *nothing* (except a clean credit report).

So... we have been tossing around the idea lately of simply voluntarily allowing the bank to repossess the home so we can buy a site-built home in a good neighborhood where we can raise a kid and hopefully make money off the sale of the new home at a future date. I'm unsure of how this is done, and if it can be done "cleanly" so that it shows up on our credit report as "voluntarily repossession - never late".

Also, how badly (point-wise) might this affect my credit score? I understand such a question is rather arbitrary, but any information along these lines from someone who knows would be appreciated.

I know "giving back" a home to the bank might be viewed as "financially irresponsible", "unethical" etc, but after doing a bit of math, it seems to make more sense financially (in the long run) to go forth with giving up the home, letting it affect our credit score (for seven years?), but keep everything else in good order. As I mentioned earlier, the goal is to have appreciable real estate over the next 5-10 years as opposed to a $20k deficit on this mobile home.

Any thoughts, ideas, concerns?
PLEASE ADVISE! I know it might be brutal...

Matt
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