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jerry
Moderator
Joined: 17 Oct 2005
Posts: 1754
Location: MICHIGAN
260.24 Dollars($)
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Hi Tinybuns,
If you go for a deed in lieu, you do not have to pay the deficient amount arising out of the sale of the house. The difference would be forgiven by the lender. However, this will hurt your credit almost as much as a foreclosure will do.
Thanks,
Jerry |
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Guest
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I am not sure how this factors in with my situation but the Deed in Lieu I have been offered requires me to repay $12k over 100 months. FYI -- according to Wells Fargo, this requirement is from the Mortgage Insurance company.
Be wise and try to do as much homework as possible-you can see from this and numerous other sites that answers vary and you may have to dig really deep to get the "right" answer. I even spoke with a HUD/FHA certified credit counselor and they could not speak to the exact credit implications. |
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savior70
Joined: 25 Mar 2009
Posts: 1338
Location: Florida
152.59 Dollars($)
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Hi
This does vary from one lender to another. But, generally, you are not supposed to pay the deficient amount in case of a deed in lieu. However, if it is a short sale, you will have to pay the deficient amount. Thus one really has to check with one's individual lender to know about the implications of either a deed in lieu or a short sale. |
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Paul W.
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Post subject: Deed in Lieu and a 2nd |
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what is the process of doing a deed in lieu with a 2nd?
_________________
Need help choosing the right loan? Get free consultation from community lenders/consultant |
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savior70
Joined: 25 Mar 2009
Posts: 1338
Location: Florida
152.59 Dollars($)
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Hi Paul,
You can do a deed in lieu of foreclosure on your first loan. To do that you need to send the lender a hardship letter stating what difficulties you are facing at present and why you would want a deed in lieu. However, with a second mortgage on the property, the first lender might not be ready to do a DIL. You need to talk with the loss mitigation department and negotiate with them. |
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joe3456
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Post subject: short sale |
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| I keep hearing that the bank probably wont come after the difference in a short sale. You keep saying that they will. If I'm 100,000 underwater, why would I want a short sale? Is saving my credit worth 100 grand? DIL seems like it would be a better option if they wave the deficiency. I don't know who do believe either. |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1651
Location: New Brunswick, New Jersey
308.83 Dollars($)
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Hi joe,
In case of short sale, the lender has the right to sue you for the deficient amount or charge off the deficient amount. However, if the lender is convinced that your financial situation is bad and you won't be able to pay the deficient amount, then the lender may forgive it. This will depend upon the discretion of the lender.
In case of a deed in lieu, the lender will not ask for the deficient amount. But, the credit score in deed in lieu is lowered by 250 points. If you are not concerned about your credit score, then you can definitely go for deed in lieu.
Take care. |
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yesenia
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Post subject: mortgage |
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| I have'nt have tenants for over 5 months now. My husband lost hours of work and i don't thing that i can keep up with the payments. Do you think that Deed in Lieu is a good option for me |
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adonis
Joined: 22 Oct 2005
Posts: 3777
Location: ALASKA
109.26 Dollars($)
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Welcome yesenia,
If you have defaulted the loan, then you can definitely apply for a deed in lieu. However, you would lose your home in this process and your credit score will also get tarnished. In my opinion, you should try for a loan modification which will help you in saving your property.
_________________
Procrastination is the enemy of your financial sucess |
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sharercs
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Post subject: Short Sale Deed in Lieu |
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| We have a rental home in Ga that we had a short sale offer on. Wells fargo lost our paperwork that was faxed and then UPS's to them 3 times. They then lost the realtors faxes 3 times too in Fort Mills. The potetial buyer walked. We have managed to hold off for two more months. but still no job for hubby and his unemployment has about 9 weeks left. We can not make the difference between the payment and the rent check any more. Other debt is piling up so we have requested a deed in lieu of. I am very concerned that we can not pay the bills we have let alone wells fargo wanting more? I am so angry with them over this, which is a long story covering a botch appraisal on their part... but there is little that we can do about that. Our credit score has been close to 800 for years, and now we are wiped out, and facing Fort Mills endless paper loss. My first question is how long does it take, what do I do with the rent checks during this time frame, and is anyone else going after banks like Wells Fargo that refuse to work with you after taxpayers bailed them out? |
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sharercs
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Post subject: One more question about dil |
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| The home we requested the dil is located in GA. it was our principal home, but when we could not sell it we rented it out. We have be MO residence for over a year now. How will this effect us? From what I heave read onthe internet GA generally doesn't do dil, but will they if you dont live in that state? |
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anon matt
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Post subject: Deid in leiu |
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| So to start the process for deed in leiu I need to write a hardship letter to the lender, and if i have been currently making my payments and may be able to for the next couple months should i stop making them now so I can show a hardship easier |
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adonis
Joined: 22 Oct 2005
Posts: 3777
Location: ALASKA
109.26 Dollars($)
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Hi,
To sharercs,
You need to contact your lender and check it out with him whether he would accept your deed in lieu request or not. You will have to write a hardship letter to the lender for that. As far as the tenants are concerned, you can inform them that you are planning for a deed in lieu and give them time to move out of the property. As you have rented it out, your principle property has been converted to a investment property. However, you should note that a deed in lieu will lower your credit by 250 points.
To anon matt,
Yes, you'll have to write a hardship letter to the lender to start the process of deed in lieu. You need to convince your lender about your hardship. Moreover, the lender will check your financial situation before approving the deed in lieu. If the lender finds that you intentionally stopped the payments, I don’t think he would accept your deed in lieu.
_________________
Procrastination is the enemy of your financial sucess |
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Tanders
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Post subject: Loan Modification |
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| Can you get a loan modification on a rental property? |
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adonis
Joined: 22 Oct 2005
Posts: 3777
Location: ALASKA
109.26 Dollars($)
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Hi Tanders,
As far as I know, you can modify your loan for the rental property.
_________________
Procrastination is the enemy of your financial sucess |
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