If you do not want this home any more then short sale is the best option to choose. So talk to the lender ASAP and try it out. It will not affect your credit much.
Feel free to ask if you have any further questions.
Posted: Tue May 27, 2008 6:45 am Post subject: Deed In Lieu of Foreclosure vs. Short Sale
I have talked to my mortgage company regarding my inability to continue to pay my mortgage (currently @ 11%!). I have furnished them with all of the documentation they are requiring to review my account. They have suggestd a short sale or "Deed in Lieu of Foreclosure". Which option is better for me? My house has been on the market for a year, with no offers. I have been unemployed for a year, and have depleted all of my other assets, including selling cars, other property, household items, etc.
Short sale is a better option because it will affect your credit report much lesser than the deed in lieu of foreclosure and you can get approve for another home loan within 18 months after the short sale if you maintain your credit well.
BTW if you cannot short sale the property then go for deed in lieu. In that case if the lender accepts it then he will not come after you for the deficiency judgment.
Feel free to ask if you have any further questions.
I think Arizona is an anti deficiency state. So the lender cannot come after you for the deficiency judgment. But it does not apply for the second mortgage or lien of equity. So the second mortgage lender can come after you for the deficiency judgment.
BTW if the lender accepts deed in lieu of foreclosure then he cannot come after you for the deficiency judgment.
Feel free to ask if you have any further questions.
Posted: Fri Jul 04, 2008 2:16 am Post subject: Arizona anti-deficiency
Larry,
I have a qst about your post - are yousaying that if you so a short sale, the purchae money mortgage holder can't come after you for the deficiency, but a HELOAN for example could? Butm if you do deed in lieu, they can both come after you for the deficiency?
I am sorry if I have said anything wrong but as far as I know if the lender accepts the deed in lieu he cannot come after you for the deficiency. But if the second lien holder doesn’t accept the DIL then he can come after the deficiency and even plan lien on your other properties.
Hope an able to clarify it to you. Feel free to ask if you have further questions or doubts.
Posted: Fri Jul 18, 2008 11:41 am Post subject: UPSIDE DOWN ON LOAN
Hi,
we are at least 200k upside down on our loan,we are not behind on our payments. we want to let the house go, so what are our best options? We are considering a short sale, deed in lieu, or if we have to we will let it foreclose. Are there any other options that would be better than any of these?
Try to sell out the property. if you cannot sell then request you bank to accept the deed in lieu as you cannot affod the payments any more and cannot even sell the property.
Posted: Wed Oct 08, 2008 9:07 am Post subject: Deed in Lieu best option?
I worked for 40+ years and became disabled in Jan. 2006, approx a year after buying my Michigan home. After 24mo of no income and no health insurance I was granted SSDisability and Medicare. My income is half of what it used to be. In those 24 mo I exhausted all of my savings and cashed in my Roth IRA to make ends meet and pay medical bills. My current mortgage holder is Chase. I have completed a 3 month reduced payment forbearance period. I need to know what will happen next because my income will not change in the forseeable future. I have phoned Chase countless times and sent them 2 hardship letters. Every time I call I get a different person who claims to know nothing about my situation, the forbearance, or the hardship letters. What should I do next? Move to a subsidized apt.? Stay until they throw me out? I cannot afford a lawyer. Oh, my home has been listed with a realtor for 10 months with no buyers despite reducing the asking price from $85,000 to $80,000. I owe $72,000. I am desperate for some advice as I live alone with no support system to turn to. Thanks in advance.
Sorry to hear about your medical and financial issues that you are now facing.
You can still ask for a workout option with Chase.
Be sure that you ask to speak to someone in the Loss Mitigation Department. This is the department that can grant you and qualify you for other workout options to keep you in your home. These options do include a loan modification - based upon the fact that you have encountered a loss of income,etc... - (if you have an ARM, be sure to ask for them to put you on a lower fixed rate as well).
But make sure that you are speaking to a representative in the Loss Mitigation Department!! This is very important!! Ask for the person who is assigned to your file (it may be the same person who set up your temporary forbearance plan!)...Be sure to get the direct phone number and direct fax number for this person! This is the person you need to be communicating with at all times.
Usually by the time a homeowner has defaulted on 2-3 payments, a lender is likely to begin the Foreclosure process. You do not want this to happen.
Other workout options include a short sale (the lender will accept a sale offer on your home that is less than the amount of pay off you currently owe). Your Loss Mitigation representative will know what workout plans you will be able to qualify for. Keep in mind, that with a loan modification, your income will need to exceed your monthly expenses with a remaining surplus of about $200.00 a month.
You are welcome to visit home-buddies.com and review a free mortgage resolution guide there as well.
I hope that this information becomes very helpful to you. Please let us know what else we may try to help you with.
Posted: Wed Oct 15, 2008 10:59 am Post subject: Is there anything else I can do to keep my house?
Hello, my husband and I purchased our home back in 2006. Since then I have gotten pregnant twice and have had two new children. Each time I was pregnant I was unable to work for at least 1 month and a half. Since I didn't work, I didn't get paid.This put us behind in all of our bills. My husband's job has decreased his salary, and I was just involved an extremely bad car accident in which our only vehicle was totaled. We let our lenders know and since then have tried everything from loan modifications to repayment plans. We have just not been able to catch up on the bills. We don't qualify for refinacing, but our lender was just bought out by one of the banks and are offering a home retention program to lenders with the type of loan we have. The only thing is that for our loan type they are only offering this program to you if the value of your home has went down due to the current decrease in the sell of houses. We were told that since we are behind in our mortgage by three months, pre-forclosure process may be initiated at any time. My lender will not begin to notify borrowers of their eligibility for the home retention program until December 1. My husband and I don't know what to do. We have looked into both short-sales and deed-in-leiu but know what to do. Do you have any advice you can give me? All is appreciated.
You can personally speak to the lender and tell him about the conditions you are facing and ask him if he could tell you about the new plan now. If your cause is genuine, he may tell you about the plan. You can even try renting your house, if that is possible for you.
In case, it doesn't work, you can either try for short sale or a deed in lieu foreclosure. Both the processes are more or less the same. You will have to give away the home to the lender and he will mark you a note stating that the loan is paid off. Then he will try selling the property in the market to recover the debt. Generally there remains a deficient amount which the lender may ask you to pay back in case of a short sale. However, in case of deed-in-lieu, this amount is forgiven but then you will have to pay taxes.
Posted: Sat Oct 18, 2008 3:23 pm Post subject: short sale
I am hearing so many different things Im not sure what to think. I asked my morgage company to do a deed in lieu but i heard if they take it and resell my house i wont have to pay the difference if it sells for less that i owe right now,but I talked to their customer service dept and she said if they actually sell the house for less they will come after me for the difference. I have been under the assumption that if they took the deed that will cancel the loan on my part.
does anyone know the right answer? I live in Ohio and its one of the states that the homes are just not selling right now. I got divorced and I just cant do it on my own.
It depends on the lender whether he will forgive the deficient amount or not. In cases of deed-in-lieu, the lenders generally forgive the deficient amount. But in case of short sale, the lender has all the right to come after you for the deficient amount. You can speak to your lender and if your reason for not paying the debts satisfies the lender, he may forgive the deficient amount.
larry
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