Walking away from a Canadian mortgage
August 6, 2014 10:36 AM Subscribe
I want to walk away from my home and mortgage because I purchased a tainted property. The fellow next door is a (locally) notorious ex-convict and sex offender.
I realize this is something I should go to a lawyer about but I just need a sense of things here first. This is in Canada.
I can’t sell the home to anyone locally, and I can’t ethically sell this 4 bedroom home with a large yard to another unsuspecting family from out of town, as was done to me. I can’t justify putting any more money into it, which really needs to be done before I could sell it.
Is there a way I can walk away without hurting my credit?
Can I hire a lawyer to negotiate with the bank on my behalf anonymously? I know there are lawyers who do this sort of negotiating for tax cheats. I’d happily pay a one-time penalty to keep my credit.
Can you think of another option?
ICYW, I have tried to find a lawyer who will challenge the seller of the home who was VERY underhanded in what he did to my family and I, but no lawyer will touch it. Three years have elapsed since the purchase of my home. We tried to stick it out and listened to the people who said “Oh it won’t be so bad.” It was that bad. He is a bully and intimidating. Death threats have been made. Peace bonds have been issued. I have small children. I want out now.
He owns his home free and clear. He's about to do another stint in jail in the next year or so for more firearm and sexual offenses.
mortgagewalkawaythrowaway@gmail.com
I realize this is something I should go to a lawyer about but I just need a sense of things here first. This is in Canada.
I can’t sell the home to anyone locally, and I can’t ethically sell this 4 bedroom home with a large yard to another unsuspecting family from out of town, as was done to me. I can’t justify putting any more money into it, which really needs to be done before I could sell it.
Is there a way I can walk away without hurting my credit?
Can I hire a lawyer to negotiate with the bank on my behalf anonymously? I know there are lawyers who do this sort of negotiating for tax cheats. I’d happily pay a one-time penalty to keep my credit.
Can you think of another option?
ICYW, I have tried to find a lawyer who will challenge the seller of the home who was VERY underhanded in what he did to my family and I, but no lawyer will touch it. Three years have elapsed since the purchase of my home. We tried to stick it out and listened to the people who said “Oh it won’t be so bad.” It was that bad. He is a bully and intimidating. Death threats have been made. Peace bonds have been issued. I have small children. I want out now.
He owns his home free and clear. He's about to do another stint in jail in the next year or so for more firearm and sexual offenses.
mortgagewalkawaythrowaway@gmail.com
Some of this may depend on what province you're in.
posted by one more dead town's last parade at 12:06 PM on August 6, 2014
posted by one more dead town's last parade at 12:06 PM on August 6, 2014
I hate to mention this, but if you walk away from the house, the bank holding the mortgage will attempt to sell the house, and it will go to another unsuspecting family from out of town, so I don't really see how this improves the ethical situation. And it's very unlikely that you can walk away from this without hurting your credit — it was hardly the lender's fault that you wound up with such an awful neighbour.
You might be better off seeking legal and community support against the neighbour. If he's going to jail soon, that should improve things.
posted by ubiquity at 12:08 PM on August 6, 2014 [11 favorites]
You might be better off seeking legal and community support against the neighbour. If he's going to jail soon, that should improve things.
posted by ubiquity at 12:08 PM on August 6, 2014 [11 favorites]
This is a big big big stretch, but if this guy owns his home outright and will likely be in and out for short prison terms until...he dies?...it is almost certain that another family will have to deal with him at some point.
Depending on your personal finances being able to take a hit, or the likelihood of gathering community support, and/or your area's zoning laws, it might be possible to demolish the house and use the land for something else. One middle-class neighborhood I know has a pet cemetery (really) on what looks like a residential lot. And it's actually not creepy--or certainly less creepy than the experience of living there with young children.
posted by magdalemon at 12:48 PM on August 6, 2014
Depending on your personal finances being able to take a hit, or the likelihood of gathering community support, and/or your area's zoning laws, it might be possible to demolish the house and use the land for something else. One middle-class neighborhood I know has a pet cemetery (really) on what looks like a residential lot. And it's actually not creepy--or certainly less creepy than the experience of living there with young children.
posted by magdalemon at 12:48 PM on August 6, 2014
You need to Google defaulting on a mortgage Your Province. As far as I know, there is no way to default on a mortgage without killing your credit, though the duration of the credit death varies -- I know of places where it's 3 years, others where it's 7. If you know that's going to happen, though, there are steps you can take to prepare for that. I'd consult with a bankruptcy attorney, who can also advise you on all of the steps leading up to bankruptcy but not declaring. This includes returning the keys to the bank and defaulting.
posted by DarlingBri at 3:06 PM on August 6, 2014
posted by DarlingBri at 3:06 PM on August 6, 2014
In terms of ethics: What about filing a complaint against the realtor with his/her licensing board? I'm sure they have some kind of duty of care to inform prospective buyers about armed and dangerous sex offending neighbours. I mean I'd imagine that in a lawsuit, it might be thought that it was partly your responsibility to have thoroughly checked things out in advance -- although seriously, who'd think of that, and what are the odds? -- but the agent, I'm sure, had a professional obligation, too, and failed it. If s/he loses his/her license (or suffers some other penalty) for misrepresenting or concealing information, maybe other agents in the area would be more inclined to disclose to other out of town buyers. (Unless it was a private seller?)
Between that, raising awareness in the community, and following whatever legal procedures are available to you (before leaving however you can), I think it's at least partway to balancing your obligations to other buyers, and your obligation to yourself, to not live and raise your kids in fear of harm or death.
posted by cotton dress sock at 3:06 PM on August 6, 2014 [2 favorites]
Between that, raising awareness in the community, and following whatever legal procedures are available to you (before leaving however you can), I think it's at least partway to balancing your obligations to other buyers, and your obligation to yourself, to not live and raise your kids in fear of harm or death.
posted by cotton dress sock at 3:06 PM on August 6, 2014 [2 favorites]
Go to the media and tell them your story - and then leave. Your credit is going to be tarnished but the bank was a party to this transaction and it may be possible to publicly shame them into helping you. I don't see any other alternative.
posted by brownrd at 3:08 PM on August 6, 2014 [2 favorites]
posted by brownrd at 3:08 PM on August 6, 2014 [2 favorites]
He owns his home free and clear.
Death threats have been made. Peace bonds have been issued.
Can you sue him civilly? You can show damages (the lower value of your house), there is apparently enough documentation of his actions to justify a Peace Bond and he apparently has an asset that can be monetized. That all seems to add up to something worth exploring but IANAL.
And what about renting? You can be upfront with the information and offer a discount. Even if the tenant underestimates the misery of the situation, they are only tied up for the length of the lease, which you could always let them out of. Much less of an ethical problem for you, I'd think. And obviously the rent would help offset your continuing mortgage payments.
posted by mullacc at 3:48 PM on August 6, 2014 [4 favorites]
Death threats have been made. Peace bonds have been issued.
Can you sue him civilly? You can show damages (the lower value of your house), there is apparently enough documentation of his actions to justify a Peace Bond and he apparently has an asset that can be monetized. That all seems to add up to something worth exploring but IANAL.
And what about renting? You can be upfront with the information and offer a discount. Even if the tenant underestimates the misery of the situation, they are only tied up for the length of the lease, which you could always let them out of. Much less of an ethical problem for you, I'd think. And obviously the rent would help offset your continuing mortgage payments.
posted by mullacc at 3:48 PM on August 6, 2014 [4 favorites]
Others have said similar things but having a foreclosure without hurting your credit isn't foreseeable. It is far from moral to ask the lender and their employees to just write off the loan.
Sadly you're unlikely to negotiate with the bank as they have no reason to do so. The frustrating thing is if you've been a good customer they have no incentive to take less of a payoff and especially to just void it altogether.
Might be able to sue the seller depending on the local laws but unless the seller has assets all you're likely to get is a judgement.
Here in the US you generally have to wait 3 years from the time a foreclosure is finalized. This can be years after the foreclosure process starts.
During that 3 years, keep increasing your credit score. Continue to finance whatever you can. A credit card is a great method to do this. Get a credit card, have it pay your electric bill automatically and then throw away the card. If you don't have the card you can't use it or rather over-use it. Paying the electric bill is the one bill that is most likely to get paid every month. This way you are not spending 1 dime more than you would have spent just because you have a card. Pay the bill in full. You don't make a $15 payment to your electric bill, don't make a $15 payment to the credit card bill which consists of nothing but your electric bill.
You'll find that having a foreclosure is far from a life-changing event.
That being said, what about selling it or donating it (with possible tax benefits?) to a religious or other charity group. They may use it for some other purpose that might not be bothered by such a neighbor.
Heck if the Westboro people have a branch where you're at it might be fun to have them move in. Watch the sex-offender start calling his property tainted because of his new neighbors
posted by 2manyusernames at 4:05 PM on August 6, 2014 [2 favorites]
Sadly you're unlikely to negotiate with the bank as they have no reason to do so. The frustrating thing is if you've been a good customer they have no incentive to take less of a payoff and especially to just void it altogether.
Might be able to sue the seller depending on the local laws but unless the seller has assets all you're likely to get is a judgement.
Here in the US you generally have to wait 3 years from the time a foreclosure is finalized. This can be years after the foreclosure process starts.
During that 3 years, keep increasing your credit score. Continue to finance whatever you can. A credit card is a great method to do this. Get a credit card, have it pay your electric bill automatically and then throw away the card. If you don't have the card you can't use it or rather over-use it. Paying the electric bill is the one bill that is most likely to get paid every month. This way you are not spending 1 dime more than you would have spent just because you have a card. Pay the bill in full. You don't make a $15 payment to your electric bill, don't make a $15 payment to the credit card bill which consists of nothing but your electric bill.
You'll find that having a foreclosure is far from a life-changing event.
That being said, what about selling it or donating it (with possible tax benefits?) to a religious or other charity group. They may use it for some other purpose that might not be bothered by such a neighbor.
Heck if the Westboro people have a branch where you're at it might be fun to have them move in. Watch the sex-offender start calling his property tainted because of his new neighbors
posted by 2manyusernames at 4:05 PM on August 6, 2014 [2 favorites]
Put it up for rental or sale at fair market value. Without making a big deal of it, be open and honest about your experience with the neighbor.
posted by aniola at 4:16 PM on August 6, 2014 [1 favorite]
posted by aniola at 4:16 PM on August 6, 2014 [1 favorite]
I applaud your thinking about this ethically and in consideration of the next owner of your home. Really, that shows a lot of class and foresight. I'd hate to see your economic future (and that of your family) at risk because of a neighbor.
No matter what you do, the bank will sell it to someone else, and someone else will absolutely be moving into this house. It's worth it for now to list your home at an appealing yet fair price, be honest about why you're leaving, and see what happens.
It's possible you may be able to find a buyer for whom living next to your neighbor is a known and acceptable risk. Perhaps the new owner will be someone who travels a lot and doesn't have kids and wants a house Just Like Yours at an amenable price. But you never know until you list it.
I really hope this works out for you and your family.
posted by mochapickle at 10:21 PM on August 6, 2014
No matter what you do, the bank will sell it to someone else, and someone else will absolutely be moving into this house. It's worth it for now to list your home at an appealing yet fair price, be honest about why you're leaving, and see what happens.
It's possible you may be able to find a buyer for whom living next to your neighbor is a known and acceptable risk. Perhaps the new owner will be someone who travels a lot and doesn't have kids and wants a house Just Like Yours at an amenable price. But you never know until you list it.
I really hope this works out for you and your family.
posted by mochapickle at 10:21 PM on August 6, 2014
Can you rent it out just to single men - like a frat house? Is there a college nearby? Even a community college?
OR can you turn it into a prison halfway house?
posted by cda at 7:48 AM on August 7, 2014
OR can you turn it into a prison halfway house?
posted by cda at 7:48 AM on August 7, 2014
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posted by Chaussette and the Pussy Cats at 10:43 AM on August 6, 2014 [5 favorites]