What effect does deed in lieu vs quit claim deed have on me.

csaubrye · Joined: 04 Sep 2006 Posts: 1 1.56 Dollars($)

I was buying a home with an interest only loan. Later I got an equity line of credit to fix it up for sale. Home values were going up in CA during that time. I fixed it up. I found the house I want to buy and decided to rent my first house until it sells. I was able to buy the second house and find a renter for the first. Then the renter didn't like having to show the house and moved out within a month. Housing prices have been going steadily down and interest rates up and I can't sell the first house and I'm only asking what I owe. I can't afford to pay both mortgages and the credit line. Foreclosure on the first house is inevitable. I just want to get rid of the house. Can I do a deed-in-lieu or what about a quit claim deed. I have the same lender for the first & equity line. Something needs to happen fast. Please help, and thank you.
Jodi

Guest 0.10 Dollars($)

Hi,

Deed-in-lieu is more favourable to quit claim deed, as Deed-in-lieu is done to avoid foreclosure and a quit claim deed is just the transfer of interest in the property to some other person.

Guest 0.10 Dollars($)

For your first house you can refinance the primary mortgage on it, to pay off the line of credit. If you get lower rate to what you have the current rates for the primary mortgage.

Thanks

sara

Hi Csaubrye,

Deed-in-lieu can be the right option for you to get out of this situation. Since you have the same lender offering you both the first loan and the creditline, so you can go for the deed-in-lieu. In case you fail to fulfill the total debt obligation, the lender may ask for the remaining amount.

You can pay off the remainder by refinancing the second loan for an amount higher than the loan balance. By this, I mean that you can go for a cash out refinance on the mortgage against your second home. However, if the lender understands your situation, he may be satisfied with the money he can obtain by selling your property after the deed-in-lieu.

Thanks,

Sara.

Guest 0.10 Dollars($)

Hi ,

Quit claim is not what you can do in this situation. You should rather go for the deed in lieu. But one thing I shold say, the deed in lieu does affect your credit score. So just think once again if you are sure you want to do that.

Derick

Caron · Posted: Mon Sep 04, 2006 10:04 pm Post subject: RE: Deed-in-lieu vs Quit claim

Hi,

A quit claim deed helps you to transfer your interest in a property to another individual but it does not guarantee that the property is free from any other lien or debt.

On the other hand, the deed-in-lieu is an alternative option to foreclosure. Most borrower unable to pay down their home loans try to avoid their homes being foreclosed by doing a deed-in-lieu.

The two processes are totally different and are used for different purposes. In your situation, I would have gone for the deed-in-lieu.

Please feel free to come up with further queries.

Thanks,

Caron.

Guest 0.10 Dollars($)

I have a home last appraised at $370k. I owe $295k. The house has been 4-sale one year now. I'm ready to be out from under it, already living in a different home paying two mortgages. Will a DIL be the solution? With this much residual equity, would I still be negatively affected? The current price is $309k but no takers. Sad

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

Hey Merrick,

Do you mean that you are you paying two mortgages on the home on which you are living now apart from the house that is for sale? please clarify.

Guest 0.10 Dollars($)

my parents own the house i live in i got ill cant pay the mrg and they cant either they are seniors on a fixed income they own their own home which has a small mrg of ninty thousand on it can the bank go after my parents home if the one i live in goes into forclosure

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

Hi Kim,

Your parents own both the house and you make mortgage payments for the one they have given you to live in, but both mortgages (one each for the two houses) are in their name. Right?

If that is so then in case of foreclosure on this house the lender can sue for getting a deficiency judgment for recovery of balance dues (if any) after foreclosure. If he is able to get a deficiency judgment for recovery of the balance amount then it is possible that a lien can be placed on the other house.

Guest 0.10 Dollars($)

I have a house that i am struggling to make payments on. It is really my only debt. I have moved in with my boyfriend and plan to be married soon. My house has been for sale for 1 year and no offers. Is deed in lieu an option?

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

Hi meshell.

Welcome to the Forum.

The deed in lieu should be your last option to chose. You should talk with the lender and sent him a hardship letter informing him the reasons for which you cannot make the payments and how are you trying to make payments. BTW if you cannot afford the payments in anyway then you can request the lender to accept the deed in lieu.

Feel free to ask if you have any further questions.

Best of luck,
Larry

cliff · Posted: Mon Jul 07, 2008 5:45 am Post subject:

Hello meshell,

As Larry stated, a Deed in Lieu should be your very last option. There are also several requirements that have to be met in order to present your lender with a Deed in Lieu:

You should be speaking to your lender right away. They have several other options available (repayment plan, loan modification, etc.) rather you are behind on payments or not. And also you still have the short sale option available to you.

Also keep in mind, the lender is not required to accept the Deed in Lieu.

I hope you have more information now to proceed. Please get in touch with your lender right away and find out what options you may qualify for. Visit home-buddies.com and review the free step by step guide.

Good luck.

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Guest 0.10 Dollars($)

Can I do DIL on investment properties? I have 3 out-of-state investment properties and am considering DIL. My primary home is in CA. Will lenders be able to go after my home in CA? Thanks.

sara · Posted: Mon Aug 18, 2008 6:30 am Post subject: RE: dil on investment properties

Hi Jenisa,

Welcome to the forums.

Since you're going for a deed in lieu, lender usually don't ask for the payment of deficiency. Therefore, I guess they won't go after your primary home.

Take Care

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