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mark
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Post subject: Is a Deed In Lieu a reasonable option for dumping property? |
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My wife and I purchased our first home in 2005 - an old fixer-upper (built 1901) a few years ago when it was just the two of us. In retrospect, it was a poor invest decision. The home is small (1000 sq/ft) and needs a lot of work (though the previous owner made many improvements). We now have two young children and I am the only one working and supporting the family on a school teacher's income. Not only has our family outgrown the home, but we do not have the money now, nor in the foreseeable future, to make the necessary improvements to create a house that is safe & comfortable for our growing family.
I am able (just barely) to make my monthly mortgage payment, but we desperately want to get out of this home. We presently have an upside-down mortgage, so selling the home seems not to be an option. We feel as though we are trapped between a rock and a hard place - prisoners in a home we do not want to be in any longer.
Is a deed in lieu of foreclosure the best option for us? We may have an opportunity to rent my mother/step-father's home as they are in the market to purchase a new home - we would simply take over their payments. This way we could sit-out of the market for a few years to re-establish good credit before we apply for our next mortgage.
Any advice we be greatly appreciated!
Thanks. |
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Niicss
Joined: 03 Oct 2005
Posts: 4770
Location: New Jersey
499.28 Dollars($)
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Hi mark!
Yes, deed in lieu is an option for you. Your credit will also be less affected in this process. You may also try renting the house if possible. From the rent you will be able to pay off the mortgage.
But for deed-in-lieu, you will have to speak to the lender. If he approves then only you can go for it.
Thanks.
_________________
Good is the Enemy of Great. |
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mark
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Post subject: short sell instead? |
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| thanks for the reply Niicss. What about short selling? Which has less impact on my credit rating - deed in lieu or short selling? Which is the quicker way to get out of ownership? |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 2617
Location: MICHIGAN
415.55 Dollars($)
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Post subject: |
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Hi Mark!
You can also try for a short sale. This will have a less impact on your credit. However, you should remember that you will have to pay the deficient amount resulting from the short sale of the property to the lender. Both deed-in-lieu and short sale will take equal amount of time.
Thanks,
Jerry |
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kat-hy
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Post subject: deed in lieu |
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| the last post to this site was oct. 2005- is it still up and running? |
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allison
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Post subject: deed in lieu of foreclosure |
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| We built our dream house in '04 and then my husband lost his job- it has been a downhill financial struggle ever since. We have had our house for sale since Dec. (only 1 party has looked at it). We have it for sale at "short sale" price per our lender. We now are scheduled for a hearing to begin the foreclosure process. I do believe we have 1 lien on our house in a small amount (under $5,000.00). We feel we should opt of deed in lieu of foreclosure and wonder if that is the right step for us and what amount of $$$ may be due from us if we take this route?? |
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Worried
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Post subject: DIL |
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| On 3/08 I entered into a DIL because I had to move from the area to care for my 90 yo Mom and was unable to sell my home after 5 months on the market and reducing the price to the bone. I contacted the lender for my options and was told the about the DIL. We initiated the DIL in March and it was completed in May/08. During that time I remained contractually current with my payments. I am now trying to buy a home in the area I moved to, was actually at the title company ready to close when the DIL somehow showed up on some report that was run and I lost my funding because it was consdiered a foreclosure. So what good this this actually do? Can they do that? |
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Niicss
Joined: 03 Oct 2005
Posts: 4770
Location: New Jersey
499.28 Dollars($)
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Post subject: |
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Hi Worried!
DIL is a sort of foreclosure but the effects of this foreclosure are far less than that of a foreclosure which is generated by a lender. A DIL will remain in your credit report for 4 years and will also lower your credit score by 250 points.
However, let me assure you that it won't be impossible for you to get a loan. But, yes, the lenders may offer you a loan at higher rate of interest. In my opinion, it will be better if you can wait for few years and built up your credit score. Then lenders may easily give you mortgage.
Thanks
_________________
Good is the Enemy of Great. |
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SRB
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Post subject: Deed in Lieu |
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| Can we continue to stay in the home and pay rent to the lender who assumes ownership of title? |
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Niicss
Joined: 03 Oct 2005
Posts: 4770
Location: New Jersey
499.28 Dollars($)
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Post subject: |
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Hi SRB!
This will depend upon the lender. Moreover, you can stay in the house and pay rents until the house is sold. Once it is sold, the new owner will ask to leave the property.
Thanks
_________________
Good is the Enemy of Great. |
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Need Help
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Post subject: Foreclosures and Bankruptcy |
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| If you have a foreclosure on your credit and then later file bankruptcy, does the foreclosure get cleared off your credit in the bankruptcy? |
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TTN
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Post subject: deed-in-lieu |
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| I moved to Las Vegas 4 years ago, not fully aware of my neighborhood but it seemed quiet enough. I bought a house. Well, now I live next door to drug dealers. I know the city better and want to move, but my house loan is higher than what people are willing to pay for for this area. I have tried to sell it and had it on the market for 4 months, and no one even walked through the front door. I want out, but I don't want to foreclose. I want to do deed-in lieu of foreclosure. Will I have problems? I am also behinds on my note because taxes are high. |
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TTN
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Post subject: What are the steps in deed in lieu of foreclosure? |
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| I moved to Las Vegas 4 years ago, not fully aware of my neighborhood but it seemed quiet enough. I bought a house. Well, now I live next door to drug dealers. I know the city better and want to move, but my house loan is higher than what people are willing to pay for for this area. I have tried to sell it and had it on the market for 4 months, and no one even walked through the front door. I want out, but I don't want to foreclose. I want to do deed-in lieu of foreclosure. Will I have problems? I am also behinds on my note because taxes are high. |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 2617
Location: MICHIGAN
415.55 Dollars($)
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Post subject: |
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Hi TTN!
As you have already listed the property in the market but got no buyer, I think the lender will not allow a deed-in-lieu. Still you can speak to the lender about both deed-in-lieu and short sale. It depends upon the discretion of the lender whether he will accept it or not.
Thanks,
Jerry |
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anonymous2316
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Post subject: deed in Lieu an option |
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I am trying sell my house for 659k the same amount i have outstanding. Obviously i am going to be short because of commissions. My bank has said DIL is an option instead of forclosure. My question is what is a good time for the house to be on the market to show that i am trying to sell it, which I am. 70 days so far. How do I intiate a dil before i get a forclosure notice, i am at 4 months behind in payments. Should I just pursue the short sale and face the embarrassment, since all the realtors will know and I am actually in the business, what a mess Help  |
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