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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1597
Location: MASSACHUSETTS
148.36 Dollars($)
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stkbtwnarcknhrdplac
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Post subject: Short sale or Deed in Lieu |
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| Is there a difference? What is it? Is one solution better than the other? |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1651
Location: New Brunswick, New Jersey
308.83 Dollars($)
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roxanne
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Post subject: deed in lieu vs forclosure |
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| My lender is working with me for a deed in lieu, what is the difference if I rode my time out in a foreclosure instead of giving them the property back. Isnt it going to still show on my credit as a default or a forclosure? |
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Calvin
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Post subject: Walking away from a mortgage |
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| I have an interested only Mortgage for $150,000. The house is now worth $100,000. I have $150,000 in a savings account. Should I pay off the mortgage or walk away from it completely and pay cash for another house. What is the better option? What are the pro's and cons? Thank you. |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.54 Dollars($)
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Post subject: RE: deed in lieu vs foreclosure |
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Hi Roxanne,
Welcome to our forums.
Even if you go for a deed-in-lieu, it will get reflected on your credit report as a negative item. Your credit score will also drop down by 250 points. However, you won't be required to pay the deficiency, if any, in case of deed-in-lieu. Please refer to a similar discussion on deed in lieu vs foreclosure to get more insight on this issue.
Good luck
_________________
Mortgage Shopping made easy with booklet |
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throwing money away
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Post subject: walk away from a mortgage |
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| I have a home which I have two mortgages on the first for 200,000 and the second for 88,000. Because of the depreciation of the housing market my home is now worth about 225,000 to 230,000. my mortgage payments are over 55% of my take home pay. I finally decided to just walk away from the mortgage. I can't do DIL because of the two mortgages and a short sale couldn't be agree upon between the two lenders. If I walk and let the primary lender file for foreclosure it will leave a deficiency of about 50,000. I make a good salary and have never had a late payment on my record, but I just can make ends meet anymore. What will happen if I just turn the keys over to the lender and be done with it. Thanks for any input, I just need to know all the negative ramifications. |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 1754
Location: MICHIGAN
260.24 Dollars($)
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Hi throwing money!
Welcome to MortgageFit Forums!
You cannot just turn the keys over to the lender. Lender will want to recover the debt which you have. He will thus want to go for a foreclosure or you will have to declare a bankruptcy. You have said that a DIL will not be possible then I would insist you to go for a short sale. Try and negotiate with both the lenders so that they agree for a short sale.
If you go for a short sale, it will not hamper the credit score. In case of bankruptcy, your credit score will be highly affected. In case your lenders do not agree for a short sale and if you decide to claim a bankruptcy, then I would suggest you to file a Chapter 13 bankruptcy. This will help you to chalk out easier terms with which you will be able to pay off ytour debts within 3-5 years.
Hope this will help you.
Thanks,
Jerry |
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dina
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Post subject: warranty deed in lieu of foreclosure |
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| hi, i have a timeshare that i cannot pay any longer for maintenance. i jsut want to give up the place so the timeshare company said that i can execute a warranty deed in lieu of foreclosure. Do I have to pay the amt listed? If i sign this, will they still try to collect the unpaid amt? please help |
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smithsussane
Joined: 18 Sep 2008
Posts: 3627
Location: Alaska
541.91 Dollars($)
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Hi dina!
Welcome to the Forums!
When you are opting for a deed-in-lieu, you will not have to pay the listed amount. If there is a deficiency, the lenders generally forgive it. You can also talk to the lender about this.
Feel free to ask if you have further queries.
Sussane |
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dina
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Post subject: deed in lieu |
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tks sussane..so what is my responsibility if i do a deed in lieu? if i want to just give up my timeshare i lose out on my downpayment, but a deed in lieu iis a better option than foreclosure and bad credit.what do you think?
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smithsussane
Joined: 18 Sep 2008
Posts: 3627
Location: Alaska
541.91 Dollars($)
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Post subject: |
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Hi dina!
Welcome back to forums!
Yes I feel a deed in lieu will always be a better option for you. For deed-in-lieu, you will first have to transfer the property or give back the property to the lender. He will offer you a note which will state that the debts has been paid. Then the lender will try and sell the property in the market and recover his debts. Due to present situation in the real estate market, there are chances that he will not be able to recover his debts fully. There will be a deficient amount which the lenders generally forgive. However you will have to give taxes for this forgiven amount as the tax department will consider this as an income.
Sussane |
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Lance
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Post subject: Deed in lieu of forclosure on rental property |
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I recently bought a new house and planned on using my existing home as a rental. I had the house rented out for the amount of the mortgage payment. That fell through and now I can only rent it for less than my payment. I have contacted my mortgage lender and they won’t work with me on lowering the payment so I can keep the house. I am a good customer and have never missed a payment or been late. They actually told me that that was part of the problem. They had options for customers who were behind in their payments, but nothing for those of us who actually pay their mortgage on time. They hinted that I should miss a payment so that they could help me now that I would be delinquent on my mortgage. My neighbor actually was told directly by their lender to do the same.
My question is… if I can’t work something out with my lender on my rental properly and they end up having to foreclose on the house, can they touch my new home? The loan is from a different lender. I don’t want to risk the home that my family lives in. I heard that I should homestead my house to protect it but I have heard that you feel that homesteading is useless. My options are to somehow sell the house short or to do a deed in lieu of foreclosure or somehow come up with the extra cash each month to cover the mortgage. The house is worth about $200k but I owe $300k on it. I guess I have to wonder if the house will ever be worth what I owe on it.
Any suggestions or thoughts on this? |
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Lauren
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Post subject: Deed In Lieu of forclosure questions |
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| I have just recently lost my job of 21 years due to reorganization and cut backs. I can't not make my mortgage payments. A friend told me about deed in lieu of forclosure. Can you explain in layman terms how does this work exactly? Would I have to leave the home right away? |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 1754
Location: MICHIGAN
260.24 Dollars($)
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Hi Lauren,
Deed in lieu is one of the best ways to avoid foreclosure. It also has less impact on your credit score. In the process of deed-in-lieu, you will have to give away the property to the lender. Once you transfer the property in his name, the lender will give you a note stating that the debt is paid off. The lender will then try to sell the property in the market and recover his debt.
In most of the cases, it happens that the lender is not able to recover his full debt. That means there remains a deficient amount between the debt you owed to him and the amount he could recover from the sale. Generally the lenders forgive this deficient amount. However, the tax department considers this forgiven amount as an income and can charge taxes on it.
Thanks,
Jerry |
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