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Dynees
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 Posted: Wed Sep 12, 2007 12:06 pm Post subject: Indiana home |
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We have a home in Indiana that we have tried to sell for 1 year with no success. We have a 1st & 2nd mtg totalling $228K. We have been told by our mtg company than due to the economy & foreclosures in IN that they will value the home at $200 (on line appraisal). The homes are now selling for 20% less than a year ago so we are upsidedown $30K. We have moved out of state due to job change & can't survive any longer with the high pymt in IN and our land contract purchase in our new location. We just heard about DIL and want to know if they may be an option for us. Please advise
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 blue
Joined: 21 Oct 2005
Posts: 1138
Location: MARYLAND
137.84 Dollars($)
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| Posted: Wed Sep 12, 2007 12:37 pm Post subject: |
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Hi Dynees,
Welcome to Mortgagefit discussion board.
As the house is not selling and you had to move because of job, deed in lieu of foreclosure can be an option to discuss with the lender.
In deed in lieu, lender accepts to take over ownership of the house in return to the balance left on the mortgage.
It is only accepted when there is financial hardship because of which the borrower is unable to continue payments. In addition to it, only after mortgage is in default, lender would consider your request to accept the house through a deed in lieu of foreclosure. But as there is a second mortgage on the house, I have doubts lender would agree to a deed in lieu.
Do let me know if you have any other questions.
Thanks
Blue
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Andy Wachowski
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| Posted: Wed Sep 12, 2007 6:06 pm Post subject: |
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| Quote: | | We just heard about DIL and want to know if they may be an option for us. |
With a 2nd mortgage on the house, I too feel that it would be difficult to convince 1st mortgage holder to take the house through a dil.
Andy Wachowski |
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larry
Joined: 27 Jun 2007
Posts: 3328
474.49 Dollars($)
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| Posted: Wed Sep 12, 2007 11:59 pm Post subject: |
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Hi Dynees,
If you have taken both the mortgages from a single lender, then there are chances that the lender may accept a deed-in-lieu. By this process, the lender will sell the house in order to recover the outstanding balance of loans from the sale proceeds.
But due to the present falling value of the houses, if the lender is not able to recover the due balance of both the mortgages after the sale, then he may forgive that debt amount which will be considered as your income. He will send a 1099 form and you will owe taxes to IRS on the amount of forgiven debt. |
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