Posted: Wed Nov 19, 2008 8:30 pm Post subject: Is it too late?
Finances aren't what they used to be. Wife and I have hit tough times and haven't been able to make payment on mortgage for last three months. We have been working with the lender, however, it advised that our options were limited to a Deed in Lieu or Short Sale. Based upon my research, appears that Deed in Lieu is the best option as it would forgive any deficiency. Problem, we recently received a letter from the lender advising that our "working with" does not pronibit the lender from moving forward with the foreclosure. Although I do not know if that process has started, I am assuming it has. What would be our best option and expected result(s)? Wife and I are new to homeownership and could really use the help. Thanks. _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
I suppose what the lender means to say is, if somehow the deed in lieu doesn't work out only then he can proceed to foreclose the property. But once the deed in lieu is approved and things go on well, I don't think the lender would consider a foreclosure.
Deed in lieu is the best option if you cannot afford to pay the deficiency. By the way, are you sure that you'll have to pay the deficiency? I mean how's the market in your area? Are homes selling at better prices? _________________ Procrastination is the enemy of your financial sucess
aaron21 Guest
Posted: Thu Nov 20, 2008 3:53 am Post subject:
There will be a deficiency. We visited with a realtor about 6 months ago and he advised that we paid approximately 30,000 more than the house was worth a the time of purchase. Based on that and the current market, I'm guessing that there will be a large deficiency as we got talked into an 80/20, interest only payments.
But Aaron, as far as I know, deed in lieu waives off the lender's right to collect the deficiency. By the way, are you on 80/20 loan with the same lender? In such a case, the lender will may charge off the 20% loan or forgive it under certain conditions only if they find that the sale proceeds aren't even enough to cover the first loan.
We are on the 80/20 with the same lender. Part of the problem we have had throughout this process is inconsistent solutions from the different departments handling each loan. One (20) is willing to decrease our interest rate and cut our payment, other (80) wants to increase our payments $350/month. I fear that we may get one to agree to the Deed but not the other. I can't get one person on the phone that is willing to discuss both loans.
Have you spoken with anyone about a loan modification? It seems from my personal experience with loan mods now, if you speak with someone who can give you the legal representation, you'll find the process much smoother. Loan mods can both lower your monthly payment to something affordable based upon your net income, and forgive the negative equity. I've seen banks agree to rates in the low 5's just to stave off a foreclosure. But it seems that homeowners doing it on their own tend to get bullied into trying to "catch up" on what they owe, and the bank threatens them when they can't. _________________ Christina Trotta
Progressive Lending, LLC
www.progressivelendingllc.com
adonis
