Miami Beach homes that are “underwater”--meaning owing more than what the property is worth—are nothing new in the current market.  The problem comes in when homeowners decide to throw in the towel and simply stop making their monthly mortgage payments altogether, a problem that leads to an eventual foreclosure among many other side effects.

The decision to walk away from Miami Beach homes that are underwater is understandable but what happens afterwards may not be worth the burden of not having to pay a mortgage.  For one, a homeowner’s credit score will nosedive significantly which makes it that much harder to get a car, credit card or even sign up for a basic cell phone plan.  Secondly, with the increased number of homeowners choosing to walk out banks are increasingly exercising their legal right to file lawsuits against homeowners and get the money owed to them.

If you find yourself struggling with mortgage payments or are entertaining the idea of walking away from your Miami Beach homes, keep in mind that there are many resources available designed to potentially lower your monthly payment via a modified loan agreement, including the government’s Making Home Affordable program.  Walking away may seem like a good solution but the long term effects are far worse.