deed in leui of forclouser

msbingly · Joined: 21 Jun 2009 Posts: 1 1.28 Dollars($)

In the state of california, is there a potential that my wages will be garnished if i follow through with a deed in leui of forclouser. How will the judgement against me affect me in general?

jenkin7 · Posted: Sun Jun 21, 2009 10:45 pm Post subject:

Hi msbingly,

If there is any deficiency due to the deed in lieu of foreclosure, the lender may get a judgment against you and garnish your wages. However, the lender often forgives the deficiency amount in a deed in lieu. Some states have strong anti-deficiency laws which protect the borrower from judgments. You can check with a lawyer if there are any strong anti-deficiency laws in your state and if they apply in your situation. You can also talk with your lender before signing the DIL agreement and check if they will sue you for the non-payment of the difference.

robertsmith2005 · Joined: 22 May 2009 Posts: 338 -0.33 Dollars($)

apart from recovery you will also be answerable for :

Deed tax: Since deed in lieu foreclosure involves transfer of property, the borrower needs to pay state deed tax upon conveyance of property to the lender. The deed tax is $1.65 for no consideration or when consideration is $500 or less.

The tax is calculated on the difference between the fair market value of your property and your mortgage balance plus liens removed from the property due to deed in lieu. It may vary from one county to another.

Income tax on canceled debt: As per Mortgage Debt Forgiveness Tax Relief Act (applicable till the end of 2009), one need not pay tax on canceled debt (unpaid loan balance which is forgiven by lender) resulting from deed in lieu. However, a borrower needs to satisfy certain conditions for mortgage tax relief.

Apart from this, you will be loosing 250 points if you're on a deed-in-lieu or foreclosure

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