Deed in lieu & credit report

0.10 Dollars($)

We have a mortgage thru EMC and they would like us to do a deed in lieu because we don't have the income to support the house payment. I said we would only agree if they would not report it as such to the credit bureaus. They said that they are required to report it as DIL. What other ways can EMC report to credit bureaus that isnt as bad as DIL? Since DIL is almost as bad as Foreclosure on the credit, there is not much to be gained by us doing DIL. We have never been late before this month, but have tried for about 6 months to get them to talk to us about loan problem but they said they wouldn 't talk to us 'til we're late. We have not made the Apr payment yet so now they call every day. My credit score is currently 800, my husband's is 700. At this point we know we can't keep the house, but we are trying to save our credit the best we can.

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

Hi,

Welcome to the forum.

If you want to save your credit then you can try out short sale first. short sale will not affect your credit as much as DIL. It will only drop your score 60 to 100 points.

But if you consider DIL then the lender cannot help but report the credit bureaus as DIL.

Feel free to ask if you have any further questions.

Best of luck,
Larry

0.10 Dollars($)

We have tried to sell since Sept 07. We're in the Phoenix area and not much is selling, several foreclosures on my street at cheap prices but no sales.

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

Hi,

So in that case DIL is better option for you and I think the lender also will not seek you deficiency judgment but they will report it to the credit bureaus.

Now if you want to stay on the property then you can even file BK chapter 13. In that case you can pay the due mortgage on an affordable rate and term.

To more about chapter 13 check out this article at http://www.mortgagefit.com/bankruptcy/foreclosure-chapter13.html

Best of luck,
Larry

gmakerley · Posted: Sat Apr 19, 2008 5:59 am Post subject:

it's pretty apparent that you're not interested in filing bankruptcy. obviously you wish to protect your credit scores as much as possible.

frankly, if there is a way in which you can stay in your home and try to weather the current storm of financial crises, that's the way to go. short sale would be the next-best alternative, it would seem; then deed in lieu, then foreclosure. clearly you wish to avoid foreclosure no matter what.

i think the lender is being as forthright as possible in advising you that they would need to report the deed in lieu to the credit repositories. if this is your end result, you'll want to keep copious records of all your conversations (if you can) with them, along with documentation concerning your hardship. undoubtedly, we all know the travails of the real estate market these days, and i'm sure most of us recognize that arizona has been hit with a severe decline in market values.

if you can persevere, that is your best option. if you cannot, don't fear the credit issue that a deed in lieu can present. maintain your payment habits with all your other creditors, and the damage to credit scores will be lessened.

helping_user

Hi guest,

If you go for a dil, the lender is bound to report it as dil only.

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