What are the credit effects if I go for deed in lieu?

Guest

WE are currently not late on our mortgage but we have been trying to sell a house for three years. It is listed for 45% lower than the bank originally appraised and 40% lower than the tax assessment. We are current but are working with the bank for a DIL. Is this the right way to go? What should we look out for if we do decide to do a DIL? How will this effect our credit?

sara · Posted: Sun Jul 22, 2007 9:40 pm Post subject: RE: dil affect credit

Hi Hope,

Welcome to the forums.

You've mentioned that your home is up for the sale. And, I don't think it is in relation to the deed-in-lieu (dil), isn't it? I doubt whether the lender will accept a deed-in-lieu if your home has been on the listing already. The lender will perhaps require you to take your home from the listing and then proceed for a deed-in-lieu.

Your credit score will be affected if you go for a deed-in-lieu but if you have any other option that the lender is willing to negotiate with you, then that will be fine I guess. By the way, haven't you talked to the lender about any such option other than a deed-in-lieu?

Take Care

miller_st · Joined: 17 Jan 2007 Posts: 918 168.96 Dollars($)

What are the payments on this mortgage? Are they too high? Have you tried refinancing to lower the rates?

As the loan is still current there are less chances that lender would listen to any request for a dil. And you must also know that dil will bring your score down by some good number of points so it is better to avoid it if possible.

You explored a lease to purchase option? Is anybody willing to take over the house by this method?

Miller

Guest

my husband lost his job at the end of december, 2006. he was out of work for a few months which caused us to get behind on our mortgage. we put the house on the market in january, 2007. we want to do a deed in lieu foreclosure, but our mortgage company refuses to do so. they will not work with us on anything. we have tried to negotiate a lower payment plan but they won't budge. how long do we have left in our home? they started forclosure proceedings in march. what other options do we have?

Guest

we have not been able to make a payment since december of 2006. yes, our payments are too high for our new income.

Caron

Hi Sara,

Welcome to our forums.

I can understand what you are going through. But have patience and try to fight out this situation. We do come across tough times in our lives but one has to overcome them and move on.

As far as I know, the lender is supposed to give you a notice regarding the length of stay in your house prior to the date of the foreclosure. Just glance through the notice and if they haven't given you something like that, just ask them about it. But hey, have you made any living arrangements for yourself?

Since the foreclosure proceeding has already started, there's not much to do as far as stopping it is concerned. So, let me be frank with you. It's going to impact your credit negatively though but it's nothing doing excepting that your husband gets a job asap - may be a part time for the time being, so that at least you guys can manage your daily expenses. And, then when he is able to secure a suitable job, he can try to rebuild his credit.

Good luck Smile

Guest

My husband has multiple sclerosis and is on permanent SS disability, making half of his former income. I refinanced the hous last year and they put the mortgage in my name only. I have been using my savings to supplement the mtg. payments, but am running out of emergency funds.
Now my husband's disease has progressed to the point where I will need to find someplace to live that is much cheaper, as I am going to have to work part time so I can help him take care of himself. I can maybe make one more payment..what do you recommend as a solution. Thanks!

jenkin7 · Posted: Mon Dec 24, 2007 5:39 am Post subject:

Hello Sue,

I think you may take the help of a real estate agent to sell off your property.

Do you know about the market conditions of your place? If that is down then you might get a lower price for your property that may not cover the entire mortgage balance. Then the lender might seek deficiency judgment to recover the balance amount and you shall remain responsible to pay that.

So I think it will be better to wait for some time if the market is down and then try to sell at a reasonable price.

Guest

Hello,

I'm in a situation where I need to sell immediately, or start Deed in Lieu proceedings. My 5 year old daughter has autism and the nearest special education services are a 3-hour bus ride, each way! We must move to another city ASAP so that we can start services for her. I currently owe $471,000 to CitiMortage for the house. I have it on the market for $525,000, but I don't believe there is any way it will sell within six months. I'm strongly considering moving at the end of this month and stopping payments on the mortgage and beginning Deed in Lieu proceedings at that time. Any advice is most welcome!

Steve

Caron · Posted: Thu Feb 07, 2008 3:42 am Post subject: RE: sell or go for deed-in-lieu

Hi Quinn,

Welcome to our forums.

Did you take the help of a real estate agent for the purpose of home sale? A good agent can really help you make it fast. How's the market in your locality? Are other homes on sale going through the same thing?

Well, what you can do is, consult a real estate agent and get an estimate of the time period within which your home may sell. Otherwise, request the lender for a deed-in-lieu. You may have to submit a hardship letter if you are not financially sound enough to manage the mortgage.

In case you sell and don't get enough to pay the loan, you'll have to pay the deficiency which you can avoid in a deed-in-lieu.

Feel free to discuss further.

Good luck

Guest

I am unable to pay the monthly payment on my home - my parents have been supplementing 1/3 of the payment but are unable to continue to do so. I have had the home listed with a realtor for several months with no prospects at all. I was interested in the deed in lieu option. I currently have no late or partial payments. I am trying to keep my credit intact as possible. What are your suggestions? There is no way I can keep the home, it is about $100,000 over what I can afford a payment on.

Guest

I am a single mother, divorced recently, So I was left with a big house and a big debt. I don;t know what to do - I love the house but I could not afford to pay the mortgage anymore. So far I am not yet behind (all my pay check goes there for 3 years now.) The house does not have an equity I have a 420K mortgage 1 & 2 please help me should I take short sale or Deed in lieu?

larry · Joined: 27 Jun 2007 Posts: 3322 474.68 Dollars($)

Hi Aimee and Titine.

Welcome to the forum.

If you are unable to make the monthly payments then you should talk with the lender and inform him your situation. Deed in lieu will have more or less similar credit effects like foreclosure on your credit report. So you can request the lender or some repayment plan or go for short sale.

And Titine, there are options other than short sale or deed in lieu. So you also should talk with the lender ASAP. If you cannot afford any of the options then you should try short sale first as it will affect your credit less than foreclosure.

To know the option through which you can avoid foreclosure you can refer to
17 ways to protect yourself from the foreclosure trap

Best of luck,
Larry

Guest

I would like to get rid of the house it's too big for me and my two kids. Will I be able to buy a smaller house if I choose the short sale?

brian1 · Posted: Sun Jul 06, 2008 1:31 am Post subject:

Short sale is seen by lenders the same as a foreclosure and it will be a minimum of 3 years before you can qualify again.

Good Luck
Brian

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