Foreclosure / Deed in Leiu Foreclusre Advice

frzhaider · Joined: 18 Sep 2008 Posts: 1 1.72 Dollars($)

Would appriciate some advice in my scenario.

1) I work and live in CA but have a condo in Virginia which I have rented.

2) I bought the condo in 2005 for 291,000 and right now its value is $241,000.

3) Each month I have to pay $1000 from my own pocket to keep the payments current.

4) So far I have never been late in any payments.

5) Now my situation has changed and its getting very hard for me to continue paying the extra $1000 each month.

6) I am considering foreclusure byt recently heard this "deed inl eiu foreclosure" termonology

7) Which option is better for me and should I get a lawyer

Cool

Also if I do either of the option can the lender garnisg my wages OR take money from the bank account

Guest 0.10 Dollars($)

Hi frzhaider!

A deed in lieu foreclosure, I believe, will be a better option for you. In this process you and the lender will be signing some legal documents by which you will be giving away all the interest in the property to the lender. Thus, the legal ownership of the property will be conveyed to the lender.

As the lenders do not deal in property or real estate, they will put the property for sale. Generally such kind of property is sold at a price less than the mortgage amount. The difference between the actual amount of mortgage and the price at which the property is sold is known as "deficiency". The lenders may or may not claim the deficient amount from you – normally they do not claim the deficient amount. But one thing that you should keep in mind is that if the lender does not claim the deficient amount, the tax department will consider this as an income on your part. So they can levy tax on that amount.

I will always suggest you to consult a lawyer who will make you aware of the legal proceedings that should follow in this case.

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