Is deed-in lieu of foreclosure right for me, how can I proce

juliomon100 · Joined: 14 Jun 2008 Posts: 3 2.12 Dollars($)

I moved to another state because the opportunites were better, I couldn't sell my house so I rented it. It has been 6 months and my tenant cannot pay the rent. I cannot pay both my rent and mortgage. I just put up my house for sale but I cannot pay this month's payment plus the market in Miami is horrible. At this point I just want to get rid of the problem. I am calling the bank next monday, should I bring up DLF? Is this for me? How long does a DLF stay in my credit history? Would this affect future employment opportunies, should I tell my employeer?

Jeanette · Posted: Sat Jun 14, 2008 10:40 am Post subject:

Deed in Lieu of Foreclosure may not be the direction you would want to take because the lender will not approve that with two loans under your belt. DIL will have the same affect on your credit as a foreclosure. You may want to consider a short sale where your credit will not be affected terribly. You should ask your lender about the short sale instead of the DIL.

Good Luck,

Jeanette Smith
Mortgage Planner
Union Mortgage Group

cliff · Posted: Sat Jun 14, 2008 1:50 pm Post subject:

Hi Juliomon

Jeanette is right. Short sale is probably a better option and will not have as bad an affect on your credit as a deed in leau.

Good luck and if you have any further questions do not hesitate to ask where here to help.

Visit this web-site Home-Buddies.com it has a step by step that will help you through this process and its free.

juliomon100 · Joined: 14 Jun 2008 Posts: 3 2.12 Dollars($)

Thanks for the advice to both.
Jeanette, I don't have two loans. I am currently renting which is one of the reason I moved out of my current home because I couldn't affort my mortgage anymore. Since I only have one loan would the bank consider a DIL? What happens in a short sale, do I have to do that or the bank takes care of that? What happens if there is no buyer?

Margarita

cliff · Posted: Sun Jun 15, 2008 1:03 pm Post subject:

Hi Margarita,

Yes they would consider a DIL; however it is not always easy. They may prefer to do a short sale. Just FYI a short sale has less of a negative affect on your credit as well. So if you can it is always better for your credit to work a short sale.

With a short sale you would want to find a realtor who has worked several successful short sales before. This is what we call a "short sale specialist" they are realtors that focus solely on short sales. You should be able to ask around your area and be put in touch with one.

DIL are ok but, there are other factors that the bank will need to consider before doing a DIL. One is if you are in a where homes are "not" selling. If this is the case they are less likely to do a DIL because they know if they take back the property they will be unable to sell it. Therefore, they are more likely to do a short sale. Once again a realtor will be a great help with all of this.

If you have any other questions do not hesitate to ask we are here to help.

juliomon100 · Joined: 14 Jun 2008 Posts: 3 2.12 Dollars($)

Your reply was very helpful, i called the bank on Monday told them my situation and was told they were going to send me a "loss mitigation" package with information on a "short sale" because I didn't qualify for a payment plan. I contacted a realtor and I am working with her right now. Hopefully a buyer will come soon. THANKS FOR YOUR HELP.

Jessica

So, the bank will be sending you the loss mitigation package. Well that's good and I think apart from short sale, there will be information on other options too.

An alternative payment plan would have been the best. But now that you don't qualify for one, check out if the package mentions something called loan modification. It's like modifying your loan terms and conditions so that you are able to keep your home. In such a case, you'll have to withdraw from the home sale. Anyway, all depends on what the bank sends you in the package.

Feel free to discuss the option suggested there and then take your own decision. I do agree with Cliff in the sense that short sale hurts credit less, but I'd like to check out other options as well.

Regards,

Jessica.

Guest 0.10 Dollars($)

I have 20 plus mortgages currently in several stages of foreclosure. Am I to understand that under IRS rules, the mortgage company has to report any deficency balance that remains even after PMI has paid out to the IRS on form 1099C? It doesn't matter whether it is a short sale, foreclosure, or even DIL.

Niicss · Joined: 03 Oct 2005 Posts: 1018 151.63 Dollars($)

Welcome DBChaser.

As far as I know the PMI company can pay the lender for the deficiency amount but I cannot understand what do you want to means by "even after PMI has paid out to the IRS on form 1099C?"

By the way you should not need to pay tax if the PMI company pay off the deficiency amount as you must have the premiums of the PMI.

Let me know if you have further queries.

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