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I am trying to do a deed-in-lieu of foreclosure on my house. I could not keep up with the payments so I decided to move out of state to take a "fairly" well paying job. In the mean time I rented my house out. Well, after moving 8 states to my "great" paying job, my new boss changed the contract and decided to pay me less. Having moved, I had no choice but to take a decrease in pay.

While at the new address, my home (in Ga) flooded. The renter left, I had no flood insurance (ins agent never processed the paperwork) and b/c I wasn't living there at the time of the flood I get no assistance from FEMA. So I went to apply for a small business loan from the gov't. Before I received the packet, I got laid off. I now can not get a SBL b/c I have no income.

I paid 136k for the house. It was assessed at 120k. A similar house just sold in my neighborhood for 109k. I have a 6k bill for the flood clean-up and about another 8k to repair the damage from the flood (oh, did I mention I am unemployed). I have to hire a licensed electrician to change the outlets in the house, obtain a builders permit, fix a leaking roof, replace the drywall in the stairwell, fix a hot water tank and an a/c unit ... all before putting the house on the market.

I've had the house on the market for the past year. I can not afford to make these repairs nor the mortgage payments so I decided to do a deed in lieu. I filled out the forms on line and submitted the last 2 pay stubs as they requested.

The individual in charge of my claim told me that according to protocol I have to put the house on the market for 90 days at 120k (what the most recent house sold for). In the mean time, I can not make the mortgage payments. I thought by having the house on the market for 1yr would be enough to go forward with the deed in lieu. I am at a loss (mentally and financially). I don't know what else to do. I thought of just patching the leaking roof and selling it "as is" at a low price but I don't think I can make the payments b/c I am paying about 1500/mnth in student loans. (they're private so I can't claim hardship or deferment). I had to move back in with my parents b/c of the financial strain I am going through. I am receiving unemployment but I am not receiving enough to pay all my bills.

Does the bank have the right to tell me to put the house back on the market? I would love to talk to a real estate lawyer but I can't afford one. Can the bank begin a foreclosure even if I'm trying to do a DIL? I explained to my mortgage company what I'm going through and they "noted" it in their computer system. Are there any forms I should sign that will protect me from a foreclosure while I'm trying to do a DIL? I am 2 months behind in my mortgage (Oct & Nov) b/c I thought a DIL would have been a smooth process and it would have been over by now!

smithsussane · Posted: Fri Nov 20, 2009 8:10 pm Post subject:

Hi ritacatl!

Welcome to forums!

I can understand that you're going through a tough situation right now. Your lender has the right to ask you to list the property in the market for 90 days. As you've applied for a deed in lieu of foreclosure, the lender will not start the foreclosure procedure immediately. If the lender rejects the deed in lieu, then he may start off with the foreclosure. I don't think there's any such form which you should sign in order to get protected from a foreclosure.

Feel free to ask if you've further queries.

Sussane

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