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deed in lieu

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em_a_em Joined: 22 Feb 2010 Posts: 1 1.35 Dollars($)	Posted: Mon Feb 22, 2010 12:28 pm    Post subject: deed in lieu Like 0 Dislike 0 hi, I'm 80/20 on interest only form of mortgage on my primary resident here in California and at present doing a short sale but unfortunately receiving on offers yet from any buyer. i have been denied of loan modification before and defaulted on my mortgag for 5 months now on the first mortgage and months on the second mortgage which is a HELOC. my first mortgage offered to consider a deed in lieu of foreclosure.Which is the best thing for me to do?, what happens to my HELOC. what are the tax ramifications, I'm the primary borrower and my husband being the secondary but the tittle is on my husband's name. PLs enlighten me.
jameshogg Joined: 20 Dec 2005 Posts: 10460 Location: Nevada 987.57 Dollars($)	Posted: Tue Feb 23, 2010 12:47 am    Post subject: Like 0 Dislike 0 Hi em_a_em, You can go for a deed in lieu with your first lender. You will be able to sell off the property in this way. However, it would reduce your credit score by 250 points. Also, it will remain as a negative mark on your credit report. However, a deed in lieu of foreclosure will not help you with your second loan. You will have to pay off the second mortgage dues to the lender. As far as taxes are concerned, the deficient balance resulting from the first loan will be forgiven by the lender. The IRS will be able to charge taxes on that amount. However, depending upon the Mortgage Debt Relief Act, you would not have to pay the taxes. Thanks

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