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Short Sale, Deed in Lieu or Foreclosure?

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Gdreeves71 Joined: 14 Apr 2011 Posts: 6 2.38 Dollars($)	Posted: Thu Apr 14, 2011 6:47 pm    Post subject: Short Sale, Deed in Lieu or Foreclosure? Like 0 Dislike 0 I am in KY. I divorced my ex husband in May 09. Moved out of the marital dwelling in July 09. He was supposed to sell or refi in his own name. He kept telling me the VA and Bank of America were messing up his paperwork on the refi/home retention assistance. In August 2010 when I called BOA to check on progress I was told it was in foreclosure status!!! He hadn't paid on it since Feb 2010. I got a court order to put it on the market in Nov 2010 and he is supposed to be responsible for any deficiency from Short Sale. Fast foward 5 months to April 2011. no payment since Feb 2010. House is now empty. He skipped town with new wife and kids. He left house in a shambles. Cleaned it up as best I could but pet odor in all carpret and smoke odor are ruining sale chances. and I cannot afford to repair. Realtor doesn't think we can get a short sale. I'm done fighting this. How bad of a hit would it be if we turned it over Deed in Lieu vs. Foreclosure? I am cosignor of his VA loan and bank already said I am held just as responsible. Sad part is...I have no other debt. Just my car payment and a small balance on a CC due to be paid off this fall.
dipaligopale Joined: 25 May 2010 Posts: 790 22.70 Dollars($)	Posted: Thu Apr 14, 2011 7:22 pm    Post subject: Like 0 Dislike 0 Hi Gdreeves71, Welcome to Mortgage fit, It is very sad to hear about your 'trapped' situation.Do you have any divorce decree? I mean any legal documents which says that after divorce,paying the mortgage is completely your EX Husband's responsibility...If you have So,then you don't have to fear about your credit...But if there is no such thing then surely you need to be prepared for the credit score dip... Going for the DIL foreclosure is the most suitable choice in this situation...What I will suggest is if you can afford to clean the house completely..(free from all types of odor) then you can ask your lender for DIL Foreclosure....But it is at the sole discretion of the lender whether to award the DIL or not.... DIL foreclosure will further drop your score by 250 points and remark will remain on your credit report for 7 yrs... You can also visit this link for further reference.... http://www.mortgagefit.com/deedinlieu/affectcredit.html#crediteffects Feel free to ask any further query if you have..... DIPA _________________ 1.The best of intentions must still have directions !--Unknown author 2.When I hear somebody sigh, "Life is hard," I am always tempted to ask, "Compared to what?" - Sydney J. Harris
Gdreeves71 Joined: 14 Apr 2011 Posts: 6 2.38 Dollars($)	Posted: Thu Apr 14, 2011 7:58 pm    Post subject: Like 0 Dislike 0 I have all court documents saying he is 100% responsible. bank would not release me from liability though. Had carpets professionally cleaned and friends & I cleaned that place top to bottom (walls floors molding you name it) Smell is in padding. Considered replacing padding and putting old carpet back down but can't afford to. Especially since the short sale is $30K less than what we owe. I'm not putting money into it. house was appraised at $170K, we owe $207K and the realtor doesn't think it will go for more than $160K. Bank won't take less than appraised value. PS I HATE BANK OF AMERICA
Gdreeves71 Joined: 14 Apr 2011 Posts: 6 2.38 Dollars($)	Posted: Thu Apr 14, 2011 7:59 pm    Post subject: Like 0 Dislike 0 ps i really have no urge to ever buy another house again especially in this economy. I'm happy renting and having someone else have to pay for repairs.
jimgilly Community Expert Joined: 28 Jan 2010 Posts: 145 Location: USA 36.21 Dollars($)	Posted: Thu Apr 14, 2011 8:28 pm    Post subject: Like 0 Dislike 0 Gdreeves71, Sorry to hear about your predicament. Since you co-signed on the loan, it appears the bank is going to hold both you and your ex accountable for the loan. I would also think you saw a major drop in your credit scores once the loan became late by 30 days, 60 days, 90 days, etc. Depending on what your credit score used to be, the late payments alone will take anywhere from 3 months to 7 years to get back to where it was. According to Fair Isaac, the company behind the FICO score, the hit to your credit score will be less with a DIL versus a foreclosure. The actual point drop is also dependent on what your current score is. The higher your current score the more points you will lose. For example, for someone with a current FICO score of 780, a DIL will typically drop their score to a range of 655 - 675. Someone with a current FICO score of 680 will see their credit score drop to a range of 610 - 630. With a foreclosure, the respective scores drop to a range of 620 - 640 and 575 - 595. Also, the time to have your current score fully recover is also dependent upon where your current score is. With a current FICO score of 780 for example, either a DIL or foreclosure will take 7 years. With a current credit score of 680, either event will take 3 years. All in all, either case will severely hurt your credit for some time to come and will be costly when you apply for a credit card, auto loan etc. I would check your credit reports and get your credit scores. If you intend to get any new credit cards or credit/loans you perhaps should consider doing so now before either a DIL or foreclosure hits your credit files.
Gdreeves71 Joined: 14 Apr 2011 Posts: 6 2.38 Dollars($)	Posted: Thu Apr 14, 2011 8:45 pm    Post subject: Like 0 Dislike 0 My current credit score is a 706 as of last week. I submitted letters and court docs to all 3 credit bureaus and there is a note on the mortgage portion of my credit report. I do not need to get a loan or CC or car. I have a 2008 SUV (may consider downgrading to something more economical now though) and I have a platinum card that i am scheduled to pay off this fall/winter. I use cash for everything I can. Only other loan i have is my school loan which is not due til i graduate in 2 years. I have a court date Monday to get the deed turned into my name only since the ex has split town and is not cooperating with sales or helping. It also goes with the contempt of court order I already have on him so if he fights it he's facing 180 days in jail. Once i have the deed in my name I can work with the bank alone.
Gdreeves71 Joined: 14 Apr 2011 Posts: 6 2.38 Dollars($)	Posted: Thu Apr 14, 2011 8:46 pm    Post subject: Like 0 Dislike 0 PS he is in about $50K of CC debt and will be filing bankruptcy i'm sure when this is done. Will that get him out of reporting the deficiency on his taxes alone?
smithsussane Joined: 18 Sep 2008 Posts: 10395 Location: Alaska 978.90 Dollars($)	Posted: Thu Apr 14, 2011 11:04 pm    Post subject: Like 0 Dislike 0 Hi Gdreeves, In case of a deed in lieu of foreclosure, the deficient balance will be forgiven by the lender and the taxes will also be forgiven by the IRS due to the Mortgage Debt Relief Act. However, in case of short sale, he will be liable for paying the deficient balance. Feel free to ask if you've further queries. Sussane
Guest	Posted: Fri Apr 15, 2011 5:29 am    Post subject: Like 0 Dislike 0 that's what i needed to know!

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