My home's value has dropped greatly. What should I do?

My home's value has dropped greatly due to surrounding foreclosures. Feels like I'm overpaying for a home now and is thinking about giving it up too even though I don't have an adjustable mortgage. I can save up some money and buy another home under my wife's name and save more than $100k. What do you think I should do? Please don't advise to sell because I know it won't.

burn it please=]
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so what are you suggesting? Becoming another foreclosure victim? That would be a devastating move for your credit, and will take years, many many years to dig yourself out of. If you don't want to hear about selling, there is not much that you can do. Either bear it and continue to make payments that you are obligated to do, or enter the ranks of the foreclosed and kiss your chances of buying a house goodbye for 5+ years. tb

i am assuming the wife's name is not on the current mortgage or property, if it is u r stuck and the 2nd deal wont work, if its not u have a game plan as long as u r not located in a community property state. if u r the lender can still come after the wife for the short fall it will suffer in the foreclosure, yes i have seen what u are proposing done, and it does work, as long as u are willing never to buy anything in ur name again, the foreclosure will ruin ur credit, and if the short fall goes to fannie mae or freddie mac, they can come after you 20 years from now. also be aware that if they get a jugdement or u have a federal loan, kiss ur income tax refunds bye bye, be careful, research, and plan accordingly, and you might be able to pull it off. alternative is to stick it out and it could be 5-10 years before u hit a break even point. its a stressful time, but proceed with caution and do what is best for your family.

The market will turn around. If you don't have to move, then stay and the value will correct itself.

There is no promise that the next neighborhood will increase in value.

If you own a good stock and there is a temporary drop in the stock market do you sell? Usually not, you wait for the market to recover.

If you own a good house and there is a temporary drop in the market do you sell? Usually not, you wait for the market to recover.

Sit tight and quit worrying. There is a very good chance the market in your area will recover in a year or two.

A home is a LONG TERM investment. Markets go up and down all the time. If you felt the home was worth it when you bought it, why do you feel like it isn't now?

Look at the situation another way. I have neighbors who purchased their homes 20 years ago. Their purchase price was way below what I paid for my house. Does that mean that I want my house any less? No, my house is my home. I paid what I felt the house was worth. Now if you paid more than what you felt the house was worth I would ask one simple question.....why would you buy something for more than you felt it was worth.

As for the foreclosure, I would be very careful. Assuming that only your name is on the house and the bank forecloses, you are still responsible for all legal costs and any difference between the final price the bank sells for and what you owe.

Lets say you owe $300,000 on the house and the bank forecloses. They rack up $10,000 in late fees and foreclosure costs. You now owe the bank $310,000. The bank gets the house back at the end of the foreclosure and sells it for $200,000. You now owe the bank $110,000 and you no longer have the house.

In this situation 2 things can happen. Thank bank keeps after you to repay the money or the bank can forgive the debt. If they come after you then you will have to pay $110,000 for thin air. Not good. If the bank forgives the debt then you will owe Uncle Sam taxes for the amount as the government sees it as income you received. Say you are in the 20% tax bracket. Uncle Sam will expect payment, at tax time, for $22,000 and Uncle Sam doesn't like to wait.

Good luck!

The foreclosure will effect your credit score, which will subsequently cause you to pay more for credit cards, insurance, potential employers will see the foreclosure, there are so many ways a foreclosure or BK will haunt you long term.

If you buy another house now, its value will go the same route of the home you are in now. So you can go through all the hassle and expense to move, only to find the new homes value will do the same thing.

I know you are disheartened now because you probably bought when RE was hot. As with all investments, value waxes and wanes. The market will recover, many predictions point to summer of 2008.

In my mind, it makes sense to stay where you are.