Question regarding deed in lieu and equity line of credit

Guest 0.10 Dollars($)

Hello all,

I would first like to say that the website you have here seems like a wonderful place and after reading through many of the posts, there are many people here who seem willing to help and give advice. With that being said I do have a question.

I am currently trying to undergo a Deed in Lieu process and do have a second mortgage or equity loan on the house. I have a 4 month old son and my wife does not work any longer due to childcare so in my salary alone we have fallen behind and can no longer afford the house. We have tried all other options to us including refinancing, forbearance and anything else that could possibly be done but to no avail.

The first creditor is Countrywide home mortgage and they have approved the deed in lieu however they have told us that the second mortgage company would need to release their lien on the house and are asking for a letter from the second company (Resurgent Capitol servers) as far as what their conditions would be. I have spoken with Resurgent and they are telling me that they would need the title to my only car or some kind of a settlement in order to release the lien. I will not be providing the title of the car as I need it for transporting my child and these people do not care about children at all. From what the person said on the phone the settlement would have to be more than $10,000 because there is too much of this going on and they cant walk away with nothing.

Has anyone ever heard of this before?

Thanks

gmakerley · Posted: Fri Jan 11, 2008 2:42 pm Post subject:

that's a terrible bind to be in - i commiserate. i have never heard of such a thing as asking for your vehicle as compensation for release of a lien, but i understand (to a minimal degree) their desire to receive some sort of compensation rather than to walk away with nothing, as they expressed.

playing hardball with you is a waste of their time, however. as we all know, you truly cannot get blood from a stone (not unless you're Jesus, and he hasn't announced His return yet).

in a perfect world, you would still be able to afford the mortgage and they would get every penny coming to them; unfortunately, this is january of 2008 and things are not quite what they used to be. perhaps they are unaware of the market.

i don't have anything profitable to say, i guess; other than the thought that if you have legal counsel, you might be able to have your counsel discuss the situation with them to see if an amicable solution can be found.

i pray you get out from under without any additional stress or strain.

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi,

Welcome to the forum.

I appreciate that you have consulted with the lender and tried to avoid foreclosure. It is good that the first lender at least approved the DIL See the second lender will not leave you without getting anything. It is actually your responsibility to pay the debt. The second mortgage is also a secure debt. Unless and until you have nothing and can’t pay it the debt, you are oblige to pay it.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Jeanette · Posted: Fri Jan 11, 2008 4:28 pm Post subject:

Hello Nschultz,

You have not sunk as yet. There are several things that you can consider.

1.--You can think about doing a short sale
2-- You can think about Mortgage
Assumption (if someone you know will
assume the mortgage)
3-- **You have considered a Deed in Lieu
4--You talked to lender for forebearance
5-- When all else fail try Acorn
Housing to get help to communicate
with lenders for some resolution.

Regards,
Jean

Guest 0.10 Dollars($)

Jean,

Maybe I wasnt clear enough in saying that we have tried everything to get out from under this burden. The house is currently up for sale at well under what it was worth last year as well as under what we owe for both mortgages. It has been on the market since 10/31/07. We do understand how a short sale works, however you have to have a buyer interested in your house in order to do the short sale. Unfortunately the mortgage assumption option is also out of the question as people these days simply do not have the funds to be able to take on such a larg investment. I have never heard of Acorn Housing, Do they help people in IL? I will attempt to find a website and read up more about them. Unfortunately I am thinking my only way out of this jam is to file for bankruptcy. Does anyone have any other suggesstions?

Thanks in advance for all your help and advice.

Nick

Jessica

Frankly speaking Nschultz, I haven't heard of a second lender asking for a settlement such as getting the title of your car. But yes, if there's a deed in lieu for the first loan, the second lender will lose his money and in return he can make you sign a deficiency letter so that you keep paying him even though you don't have the home with you any more after deed-in-lieu.

However, in your situation, may be the second lender wants to get the unpaid debt back not by way of deficiency but by taking away your car. It's all about how he makes sure that he doesn't lose much due to dil on your first loan.

As far as filing bankruptcy is concerned, it's chapter 13 that might be of help. It ensures that you are making some payments at least because you will be following a repayment plan in chapter 13 bankruptcy. But try out ACORN prior to that.

I must say Jeanette came up with some great advice, one of which is about ACORN. But as the house is already there for sale, I don't think ACORN can communicate with your lenders now. Still, I would suggest that you contact the concerned officials for further confirmation.

Check out more about ACORN Housing and how it helps borrowers.

Regards,

Jessica

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