deed in lieu of foreclosure? how?

Guest 0.10 Dollars($)

I bought my condo over a year ago. The property value has dropped about $10,000.. It's becoming very hard to keep up with the payments.. although I have no lates recorded since the purchase, I wish to petition for a deed in lue of foreclosore. I listed it for sale but buyer cancelled, leaving me again with this huge debt. I was supposed to pay $30K+ from my own pocket! I am really desperate.. maybe the process of a deed in lue of foreclosre would be less costly...??? I am to the point where I can't breath... how many lates do I have to have in order to petition for this? can I petition even though I have no lates.. I can't afford it anymore! HELP!

helping_user

Ok, so you mean that till now there isn't a single late payment. But even then you wish to go for a deed-in-lieu because you cannot manage the loan anymore.

I don't think the lender will agree to it and even if you say so, he will try to verify if at all you are not be able to pay off the loan.Only then he will approve a deed-in-lieu.

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

What type of mortgage is it? Is it an ARM? And have you searched if refinancing it would lead to reduction in rate or not? If that can be possible then you would be able to continue the payments.

After the loan is in default and you contact the lender about a deed in lieu he will ask you to give a hardship letter detailing the financial problem you have and due to which you are not able to continue the payments.

Along with the hardship letter you will have to submit income documents which will help the lender to examine your financial position and if there actually any constraints because of which you cannot continue the payments.

Instead of deed in lieu you can also request the lender about any loss modification plan where the defaults are added to the mortgage balance and the loan term is increased so that you can afford the monthly payments.

But all these options are only available after the loan is in default and not before that. What you can do is contact the lender right now and explain all the points. He will tell you whether any loss mitigation plan can be started right now or not. But chances are that lender will not agree to consider these options until the loan is in default.

Miller

Niicss · Joined: 03 Oct 2005 Posts: 807 118.35 Dollars($)

If you'd like to get more information on some of the loss mitigation option which you can discuss with your mortgage company so that the payments can be affordable then please go through this page: Loss Mitigation - Process that helps in Avoiding Foreclosure.

After reading the details given on that page discuss this issue with them to know what kind of assistance they are willing to provide to help you continue the mortgage.

Additionally, a deed in lieu would have negative affect on your credit score and getting approval for other debts can become difficult in the coming years.

hanth23 · Joined: 22 Jul 2007 Posts: 23 10.95 Dollars($)

Send a hardship letter to the lender stating the financial hardship you are facing and your intent to apply for a "Deed In Lieu of Foreclosure". Also request them to contact you, provide them with your contact details and the feasible time when they can contact you.

Guest 0.10 Dollars($)

I have a property that is in the process of deed in lue, but I have my other house, and I would like to know if with this process I can loss my other house too? I feel very bad with this issue I have three kids, wife and I don't want to be on the street for this bad economy.

larry · Joined: 27 Jun 2007 Posts: 2911 403.68 Dollars($)

Hi Claudia,

Welcome to the forum.

In the process of DIL, lenders generally do not claim deficiency judgment. But it generally depends upon the agreement with your lender. But you should not lose your "other house".

Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest 0.10 Dollars($)

My monthly house payment is too high and if I don't refinace I might have to go into forclosure.. Will my morgage company wave the prepenalty if we refinace with them.

larry · Joined: 27 Jun 2007 Posts: 2911 403.68 Dollars($)

Hi Andrea,

Welcome to the forum.

If you refinance with the same lender then he may not ask you for the prepayment penalty. But if you go to other lenders then he may ask you for the prepayment penalty as you are closing the program with your present lender.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest 0.10 Dollars($)

We have an 2 morgages one is an ARM (5.75%) and has not matured and other is fixed (12%)interest. My husband has been out of work for 10 months. I have called the lenders told them we are unable to pay for this months payment. They said they could lower my interest rate for 6mo but that is not going to help. I have been told to either go into foreclosure, deed in lieu or try a short sale. This would be the first month that we are late. But even with a lower interest rate still could not afford and owe more 80 thousand more than what marke will give what should we do?

helping_user · Posted: Tue Apr 22, 2008 12:25 am Post subject: RE:

Welcome Julie.

It's better not to go into foreclosure. You can try for a short sale or deed-in-lieu but are you sure you want to leave the home? I must say your lender has been co-operative enough in the sense that he wanted to lower the interest for the next 6 months. However, if it doesn't suit you, then it's better that you go for a deed-in-lieu though it is likely to affect your credit.

You can have a talk with the lender and ask him if he may file a deficiency judgment when you go for short sale. Also get an idea of what's the housing market is like in your locality. This will helps you to decide whether you'll go for a short sale and pay deficiency if required.

I would like to know where you reside, in which state? If it's an anti-deficiency state, then it's worth going for short sale as it will not affect your credit as much as deed in lieu.

Thanks

Guest 0.10 Dollars($)

Thanks for replying, I reside in Michigan. There are two reasons I have to leave the home 1. deminished income 2. When the 1st morg matures the interest will increase maybe to 10% so I will be paying a 12 % and 10%. Unfortuantely I can only see one choice and it is to walk away. But I don't want to walk away and still have to pay on the house either. I am not sure what my best step would be and if the lenders would even let me slide???

helping_user · Posted: Tue Apr 22, 2008 11:12 pm Post subject: RE: deed in lieu or chapter 13

Welcome back Julie.

I think then the best option for you will be to request the lender for a deed-in-lieu if at all you don't wish to occupy the house. Otherwise, you can try filing Chapter 13 bankruptcy. It's not going to have as negative an impact as thought about because here you'll be made to pay for the loans through an alternative repayment plan which you can afford to pursue. Know why Chapter 13 can be a helpful option so that you can decide accordingly.

Thanks.

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