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Larry Altherr
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Post subject: Deed in Lieu |
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| I purchased a house 2 years ago for 518,000, 10% down and have never been late. This new community was never finished and houses are down as much as 33% and still not selling. I have a Small historic hotel and have to make sound business decisions, unlike what the lending institutions have done. Bracing for what may be slower times, I want to eliminate poor investments, one of which is this house. It is my primary concern to protect my business, which has been successful for the past 15 years, and giving the house to the bank and moving into an apt I own makes since even though I will loose what I have invested in the house. I am not destitue yet but I would be if I used the same business practices as those of the lending institutions. Can a deed in Lieu of release me from this property? I am currently in contact with B of A but so far have been told since I am up to date with all payments, they will do nothing. I am trying to be pro-active in heading off problems. Thank you |
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jameshogg
Joined: 20 Dec 2005
Posts: 4189
Location: nevada
492.91 Dollars($)
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Post subject: |
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Hi Larry,
It is good to see you being pro-active and taking steps to save your business. It is true that a bank will not agree to do a deed in lieu or a short sale if you are not delinquent on your payments. You can try listing the property in the market yourself and see if you can get buyers for the property. But you should also remember that if you sell off the property, the lender will call the mortgage due immediately.
Thanks |
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Zee
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Post subject: Tenants |
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| I have a home in florida that I will be doing a deed of lieu and I wanted to know how long do I have until I tell my tenants they have to move? My 90 day trial to be posted on the market ends on Feb. 16th, and that is when I will do the deed of lieu - can someone please tell me when I am suppose to inform my tenants to move? Please help... |
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Post subject: |
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| You should inform your tenants immediately about the deed in lieu so that can move out of the property and find another place to live in. |
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jaxx
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Post subject: Proactive |
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Hello,
I'm in a situation where my wife and I can't afford the mortgage payments. We informed the lender that we can't afford the monthly payment ahead of time so we suggested doing a deed-in-lieu. Now in talking to the lender, they told us to do a short sale for 3 months and call them up for a deed-in-lieu. It doesn't make sense that they suggested this even though we informed them that our house is not selling and we have exhausted our funds. What is the lender trying to do??? Was it a good idea to tell them ahead of time about the deed-in-lieu then waiting??? Do I need to have a lawyer involved in this??? Do you have any suggestion about my situation???
Thank you,
jaxx |
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jameshogg
Joined: 20 Dec 2005
Posts: 4189
Location: nevada
492.91 Dollars($)
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Post subject: |
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Hi jaxx,
I think the lender has just given you an option of short sale. You may list the property at a lower price in the market once again and see if you can sell it or not. If you cannot sell the property, then you may again contact the lender for a deed in lieu. You may take the help of a lawyer and let him review your situation.
Thanks |
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jonathan
Joined: 29 Jan 2009
Posts: 1
1.90 Dollars($)
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Post subject: Lost - Short Sale or Deed-in-Lieu. |
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I’m in a similar Short Sale situation. Based on the advice of some (e.g. a radio talk show host and author of financial topics, and an endorsed local real-estate services provide of said radio host) we elected to seek a short sale of our property starting in August 2008. We made this decision because we were told the bank would be more willing to work with us because we would find and bring a buyer with us. Also, the advice included only doing a short sale if it was done with no recourse. We have been through 3 buyers and all have given up because the bank is taking forever to process our short sale paperwork.
I’ve recently receive conflicting advice from a lawyer who is frequently involved in foreclosures and bankruptcies. The lawyer (who has not reviewed our case in detail) recommends giving the keys to the bank to get this liability off our plate ASAP. He says the deed-in-lieu of foreclosure would be best for us because it removes the liability quicker than a short sale and by law the bank has no other recourse for the outstanding balance. The short sale does not appear to have that same protection by law, and must therefore be negotiated with the bank.
I’m now second thinking our original plan.
We originally purchased land in 2007, built a house in 2008 and moved in. We then got hit by the gas prices, a drop in my income, and a rental property across the country that was vandalized and abandoned by the tenants. We could no longer afford the home.
The appraised value of the home in 2008 was around $410,000.
Loan balance is around $390,000.
Short sale attempts have only produced offers around $275,000 to $289,000
We’ve lost 3 buyers and have been told that the bank is at least 6 weeks behind. I’m not sure what 6 weeks behind means, but it sounds like it will be at least 6 weeks before the bank will finish our short sale package, whether approved or not approved.
We just receive the lawyer’s advice to seek a deed-in-lieu of foreclosure.
We also just received another offer for $289,000.
What is the most ideal situation for my family? What would be the best course of action?
Should I accept the offer? Should I call the bank and ask for a deed-in-lieu of foreclosure?
Should I ask for the deed-in-lieu and tell them I have an offer for $289,000.
Finally, how long does a deed-in-lieu usually take to process?
I’m so lost and I just want to make the best decision and put some finality to this business.
August 2008 was the last time we made a payment. Your help is appreciated. |
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adonis
Joined: 22 Oct 2005
Posts: 3777
Location: ALASKA
109.26 Dollars($)
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Post subject: |
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Welcome jonathan,
In case of a short sale, you are liable to pay the deficient amount resulting from the sale of the property. But in case of a deed in lieu, the lender forgives the deficient amount. You will be charged taxes on this forgiven amount.
Moreover, you should note that in a short sale, the credit score is lowered by 75-100 points whereas in deed in lieu, credit score is lowered by 250 points. As far as I know, a deed in lieu takes around 90 days to complete.
If you want to save your credit score, you can go for a short sale. Otherwise you may go for a deed in lieu.
_________________
Procrastination is the enemy of your financial sucess |
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Lori
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Post subject: Short Sale vs. Foreclosure vs. Deed-in-Lieu |
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Situation:
My partner and I are trying to figure out the best way to unload a house that we can't sell and can't pay for. We were facing foreclosure several months ago, but managed to pull ourselves out of it, however, my partner filed bankruptcy in the process (the house is in her name). Now she has lost her job and I mine, we have moved to a different state and have had the house on the market for several months with no results. We will not be able to make the payment next month, but are not behind yet and want to get out from under it ASAP.
Questions:
1. Do my partner's bankruptcy limit or dictate our options?
2. Since we are not currently behind on the payments, do we need to wait until we are to do anything?
3. Considering she now already has a bankruptcy on her credit, does it really matter whether a foreclosure, short sale or deed-in-lieu goes on it now? |
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Tam in So Cal
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Post subject: Imminent Foreclosure |
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Hello,
We are over 3 months late now with our mortgage (due to husband's job loss) and, absent any 'cramdown' bankruptcy changes for mortgages, believe there is no way to save our home.
Like many people in southern CA, we are very upside-down with our mortgage, and have an 80/20 mortgage after a refinance we had to do because our original loan was going to adjust very high.
At this point we feel our only options are either a deed in lieu of foreclosure or a foreclosure. From what I understand, CA has a law, which is set to expire at the end of 2009 (but possibly already extended) which will relieve us of a tax liability if Countrywide lets us do a DIL. Is this true? I know there is a federal law that temporarily allows this as well.
My primary question is this: Since CA is supposedly a nonrecourse state, can Countrywide come after us for a deficiency if we foreclose? Does it matter if our current loan is a refinance as opposed to the original loan?
Thank you
I've done a great deal of online research on this, but the information is conflicting. |
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Zee
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Post subject: Deed Of Lieu |
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| If I do a Deed of Lieu - do they go into your personal bank account and take the money you have there? What about your credit cards? Do they close your credit cards? I have a ING DIrect account as well - do they go in there and take the little bit of money I got? Please help, Im concerned and im in the process of doing a Deed of Lieu... |
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TEXAS LAW
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Post subject: deed in lieu of foreclosure - heirs |
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Can the heirs be held responsible for the their deceased dad's mortgage? Can the mortgage company actually sue his boys (age 24 and 23) for any deficiency? The 24 year old draws SSDI off his dad's death and the 23 year old just completed college and is currently working as a part time muscian. Neither boy has any assets.
_________________
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B&J
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Post subject: 1st & 2nd Loans |
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| If you give a Deed in Lieu to the 1st mortgage lender, how do you get the 2nd mortgage lender to agree to discharge the lien. Would the 2nd lender agree to take back a promissory note for an amount much less than the debt [i.e., $25,000 on a $180,000 balance]? |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.54 Dollars($)
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Post subject: |
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What type of bankruptcy did your partner file? It's good that you are not behind on payments. But until and unless one is behind, lenders usually don't want to work out with borrowers. However, since you're in a different state, the lender may agree to accept a deed in lieu.
Since the house isn't getting old off, it's best to hand over the property to the lender. When you do so, you need to explain that in the forthcoming months it may be difficult for you to pay. Otherwise why would the lender agree to take back the property when you're making the monthly payments as required.
Has your partner included the mortgage in the bankruptcy? A deed in lieu is possible even though bankruptcy may have been filed. But the lender can't foreclose while your partner is in bankruptcy. There's an automatic stay declared on all legal action like foreclosure, wage garnishment etc.
Good luck
_________________
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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: |
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Hi Tam,
CA follows the non-recourse laws for purchase mortgages only. So, if Countrywide forecloses your property, it may come after you for the deficiency. However, if you go for a deed in lieu foreclosure, the lender won't have the right to collect the deficiency.
Take care |
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