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Niicss
Joined: 03 Oct 2005
Posts: 2579
Location: New Jersey
402.93 Dollars($)
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Welcome back Roberto.
Florida is a deficiency judgment state. But if the mortgage conpany accepts the deed in lieu of foreclosure then they will not seek the deficiency judgment.
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Good is the Enemy of Great. |
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cliff
Community Experts
Joined: 05 May 2008
Posts: 328
Location: Houston
75.44 Dollars($)
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Hi Roberto,
I can only assume that you perhaps have already spoken to your lender to find out the workout options that you may qualify for, besides Deed In Lieu, to keep your home.
Keep in mind there are certain eligibility requirements that you must meet, before your lender will even entertain the option to accept a Deed in Lieu from you:
•Are you imminently facing foreclosure? Are you at least 31 days delinquent?
•Have you exhausted all means to avoid foreclosure?
•You, the borrower, must voluntarily submit a written offer of the Deed in Lieu and it must specifically state that the offer to enter these negotiations is being made voluntarily. You must list all the conditions for which the DIL will be accepted. Including the agreed upon transfer date of the property. On that date, the property must be vacant and clear of all your personal property.
•Usually the lender requires that you have listed your home with a Realtor for at least 30 days. They need to see that you have attempted to sell the property, but that you have been unable to sell the property. They prefer for there to be no other liens against the property at all.
•The property should still be occupied, unless you provide documentation that can verify your need to vacate the property, i.e. loss of income, increased living expenses.
•The property is not a rental investment, nor used as a rental for more than 12 months.
In addition: Some lenders will report a deed in lieu of foreclosure as a foreclosure to the credit bureaus. Be aware of this, since the point of this transaction is to avoid this designation on your credit report.
If you submit a written offer to the lender, be sure it states your wish to voluntarily enter a deed in lieu of foreclosure transaction. And be sure it mentions that the Deed in Lieu is in exchange for cancellation of your mortgage debt.
I hope that we all have been helpful for you. Let us know if you still have other questions and concerns.
Good luck.
_________________
Cliff Pape
Market Analyst
www.home-buddies.com |
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EROXXZY4
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Post subject: Help! |
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My parents bought a home in P.A. 3 years ago. Commuting back and forth to N.J. 5 days a week and spending more than $700 in gas a month, not including other bills. They counted up all their bills and their monthly bills exceeded their income by 3 times. We were advised by a realtor and a banker to go through with Foreclosure. We've since moved out of the home and live in N.J.. We have a FHA loan on the home we left. Today I was told by our lender's Home Owners Assistance to send a letter for Deed in Lieu of Foreclosure. What should I put in the letter? What are the laws in P.A. when it comes to Deed In Lieu of Foreclosure? Will my parents still be held liable for the mortgage?? PLEASE HELP!!! YOU CAN EMAIL ME AT "EROXXZY4@HOTMAIL.COM"
[Email address deactivated as per forum rules. Thanks.] |
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Jon
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Post subject: Deed in Lieu |
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| My question is about the deed in lieu. I moved out of my property back in February of 2008 because my bank said that they were going to forclose on us. We found an investment company & realtor to help list the property and stop the foreclosure. It has been on the market since Feb, 2008 under a short sale & still no offer. I was told by the investor that I should consider doing the deed in lieu to help us get out of the mortgage. We have a 1st & 2nd mortgage 80/20 under the same lender. The lender has already approved the 1st mortgage into the DIL, we are just waiting on the 2nd mortgage right now. If they approve the DIL on the 2nd mortgage, can they come after us for any deficiencies after the deal is done? We took the loan out to purchase the property only & have never refinanced or did any kind of equity line of credit. I was told by some one that if that is the case, they can't come after us for any differences. Is that true? I feel that we have been communicating with the lender and trying to work out any way to save our home, but it seems useless at this stage. We have no more cash to spare and feel that this might be are last resort. Please let us know if this is the best way to go about doing this. |
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jameshogg
Joined: 20 Dec 2005
Posts: 4189
Location: nevada
492.91 Dollars($)
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Post subject: reply to EROXXZY |
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Hi EROXXZY,
Welcome to forums.
I think your parents are being asked to send a hardship letter wherein they should state why they cannot pay off the loan and what alternative option they would like to go for so that the lender can recover the money invested. Know how to write a sample hardship letter for your reference.
| Quote: | | What are the laws in P.A. when it comes to Deed In Lieu of Foreclosure? |
If it's a deed in lieu, then your parents shouldn't be personally liable for the any amount or deficiency that the lender may not be able to recoup by selling off the home after it is deeded back to the lender.
Although PA is a deficiency judgment state, but as your parents are going for a deed in lieu, they don't need to pay any deficiency. But there can be tax considerations involved. Know more on deed in lieu and tax considerations .
Thanks |
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helping_user
Joined: 31 Mar 2006
Posts: 815
Location: Hawaii
154.76 Dollars($)
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Post subject: RE: deed in lieu on 2 loans |
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Welcome Jon.
Deed in lieu of foreclosure is a process wherein you give back property to your lender when you fail to pay off the mortgage debt. Since the first lender has already accepted a deed in lieu, he'd be taking away the property and selling it off. So, there cannot be a separate deed in lieu. But if the housing market is good enough in our area, then the sale proceeds obtained after the deed in lieu on the first can be shared by both the lenders provided they agree to do so.
Usually lenders don't ask for deficiency payment in deed in lieu. So, hopefully they won't come after you once they sell the property.
Thanks. |
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eroxxzy4
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| Thank you all =) I'll be crossing my fingers that they accept the deed in lieu and won't ask for deficiency payments. Wish me luck!!! |
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randoon
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Post subject: IRS lien |
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| my property has a 150k mortgage and an IRS lien of 65k, but property value is 200k. if I do a deed in lieu will I still owe anything? |
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randoon
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Post subject: IRS lien |
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| See above post: I have missed 3 payments, it is a rental (currently rented) and I do not want to keep the home (I want it gone so the IRS lien will get paid in full thus the lien will no longer be on a vacant lot behind the home, a separate parcel). The lien is not against me, its against the prior owner (both parcels), and was their when I did a owner deed purchase. When I refi'd with this lender, Title was a lenders owner policy and they missed the lien, so it appears lender is protected. So, I am simply trying to get rid of property so that IRS lien eventually gets paid. Its in Washington State. Credit hit is not a problem. What should I do? |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.54 Dollars($)
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All the best eroxxzy. Let's hope that the deed in lieu is accepted.
To randoon:
I think the IRS lie will have priority over the mortgage lien. as such, the IRS lien should be paid off first and then the remaining amount should go towards the mortgage. Usually in case of deed in lieu, lenders don't ask for the payment of deficiency.
| Quote: | | The lien is not against me, its against the prior owner (both parcels), and was their when I did a owner deed purchase. |
Even though the IRS lien is not against you, it should be paid off because you have purchased the property.
Good luck
_________________
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stuck
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Post subject: deed in lieu question |
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| We got caught in the real estate downturn when buying a house before the other one sold. We now have two mortgages with the same mortgage company. We are not delinquent on either loan but are using up our savings quickly. Both houses are now on the market, but without immediate prospects of selling. If we do a deed in lieu of foreclosure on one house, can the mortgage company put any type of additional lien on the house we keep as long as we continue to be current with that mortgage? Both homes are in North Carolina. |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1651
Location: New Brunswick, New Jersey
308.83 Dollars($)
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Post subject: RE: |
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Hi stuck,
Welcome to the forums.
I guess the lender won't place a line on the other property because of deed in lieu on one house. This is because deed in lieu waives the lender's right to collect deficiency.
Take care |
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Melissa
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| Can a deed in Lieu still apply if i have a jumbo load split into 2 mortgages.. an 80% ande 15% loan? and could it still apply if i have it with two different lenders? |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1651
Location: New Brunswick, New Jersey
308.83 Dollars($)
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Hi Melissa,
It's difficult to make a deed in lieu (dil) work if there are 2 loans on your home, especially, if there are 2 lenders and a junior lien on the property. To know what happens to the second after dil on first , refer to a previous community discussion.
Take Care |
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gr
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Post subject: deed in lieu |
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| my dad help my uncle buy a house cause he was in bankrupt ... so the house is in his name.. now my uncle can;t afford the house n is two payments behind and now my dad's credit is in danger n also we might end in bankruptcy.... so we are thinking in the dil.... but i dont know how it works n how it might affecct us... |
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