Deed In Lieu on Credit report

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Hi,

If the lender allows, deed in lieu will be much better option than a foreclosure. But it will also affect your credit score, though not as much as a foreclosure.

Tim

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Hi Tim,

If you wish to buy a home with a mortgage in future, then you need to compile proofs of your income, assets, debts that you have paid off and you will be currently paying for.

Refer to http://www.mortgagefit.com/preapproval.html for more details on the paperwork that can help you to buy the home of your choice.

Hope that helps

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I am speaking to an attorney in regards to a bankruptcy to surrender 2 condos that turned bad investment in the FL market. I am in the mortgage business and seen people recover from a bankruptcy far more quicker than a foreclosure. Granted both do stay on the report for 7 years and both are looked upon for 24 months from filing date, but lenders can't come after you for the defiency balance. My question is though in reading about the deed in lieu of foreclosure does it affect your credit if you have never been late on the mortgage before since the mortgage is immediately setteled with the mortgage company? I'm a liitle confused, but this might be a better option for me to look into. I'm certainly not trying to get out of all my debts, but the condos I have are killing me financially!

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jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Hello Sammy,

A deed in lieu has negative effects on your credit but it is less than that of a foreclosure.

In order to be eligible for deed in lieu, you need to have some late payments. Your lender might also ask you to go for short sale if you haven't tried to sell your property before filing deed in lieu.

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How many points does your credit score drop if you have a deed in lieu?

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Hi,

Deed in lieu may lower your credit score by about 50-100 points.

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Hi,

I have to make a quick decision in regards to either proceed with a Deed of Lieu or a Short Sale. But I'm not sure what is my best option. I've already contacted a real estate agent to proceed with a short sale but was declined as my mortgage company went out of business and was purchased by another company. My current mortgage company has confirmed that they are willing to hear any offer's that we may have. But I am unsure which has a more negative effect on my credit score a Deed of Lieu or a Short Sale. I heard that with a short sale the effect can stay on your credit for only 7 months. Is this true? If so, how long does a Deed of Lieu last on your credit>

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

Hi Melissa,

Welcome to this forum.

Short Sale is far better than Deed in lieu of foreclosure and has lesser negative effects on your credit report. DIL and Short Sale both stays on your credit report for almost 7 years but DIL will drop your credit more than 100 points whereas Short Sale will drop your credit score only around 50 points and you can be approve for another loan after 18 months.

Thanks,
Larry

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Hello Melissa,

There is another factor that should be considered. In case of a deed in lieu of foreclosure, the lender cannot seek a deficiency judgment but he might do that if you are going for a short sale, unless your state has anti-deficiency laws.

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i am a senior and on a low income i have a disabled son who lives with me. my husband passed away five years ago and the home we bought twenty years ago is in need of major foundation repairs i have excellent credit but cannot afford the repairs needed on the property. i have contacted the mortgage company and they suggested a deed in lieu but this was two months ago. what will this do to my credit if i do the deed in lieu.

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

Hi Renna,

Welcome to the forum.

Is it a mortgaged property? Why do you want to do deed in lieu? Are you late on your mortgage payments?

As you have said "the home we bought twenty years ago" I think there is good enough equity in your property. So why don't you consider Reverse mortgage? If you want you can get a lump some money at a single time for the repair works and to meet you other needs or you can take the money on a monthly basis.

If you want to know more about reverse mortgage, you can check this article out on reverse mortgage - http://www.mortgagefit.com/reverse.html

Hope this will help you Smile

Feel free to ask if you have any further questions.

Best of luck,
Larry

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My company recently went through some restructuring and In turn this cost me a great amount of financial problems. We had relocated to a new area and within a year my pay was dropped 10,000.00. Needless to say this was the end of last year and also the time when the housing market was starting to plummett. We did get renters that were interested in renting our house however, they were always late and we eventually had to evict them. Now we are in a situation where because of the market dropping on housing my house no longer appraises for what it was worth 17months ago and I can't find anyone to refinance our house because of what I owe and where the appraisal comes in at. We are in a bad situation and are considering giving our house back. Also I took another position along the same line of work and have transfered out of the area. What would be the best thing for us to do as we have always had good credit and this would be the first time anything like this would come against our credit. We are currently working with a realtor trying to do a short sell on our house but are finding quite a bit of resistance when trying to get info from our mortgage company. Any advice?

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

Hi Ken,

Welcome to the forum.

It is good that you are at least trying to pay off the mortgage company through the process of short sell. I think you should contact with you mortgage company directly and consult with them about you problem and check out what are the options you can afford.

I think you can try out something like forbearance or loan modification to avoid foreclosure. Check out this article to know more options at http://www.mortgagefit.com/foreclosure/17ways-avoid.html

Hope that helps you.

Feel free to ask if you have any further questions.

Best of luck,
Larry

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Try calling Sterling Asset and Equity Corp., Joe 561-330-0400

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