Which option do I choose - DIL or short sale?

prkaiser1 · Joined: 06 May 2007 Posts: 3 3.82 Dollars($)

Greetings,

I was wondering if I could get some advice on a truly horrible situation I am in. To give some background: I am Active Duty Military and spent 3 years on a special duty in Michigan (and purchased a home). I recieved orders and was forced to moove..I have been stationed in North Carolina since July 06. Our house in michigan has been on the market for 14 months now, and is sitting vacant. My wife and children remained in michigan to try to sell the house until December, and moved to NC in January. Since we moved, we have paid 10K in mortgage payments (we remain current, and have not missed a payment)...on top of that we have the house priced to take an additional 10K+ loss IF the house sells...Still no dice...What are my options?? To top it off, I am scheduled to deploy soon for an extended period of time and dont want to leave this headache on my family when I am gone. This is truly a nightmare..

All our lives we have remained debt free, and managed to put away some money..someting we have been very proud of on a military salary. All we have worked so hard for is dwindling away every month...Another question I have is would it be probable for the lender to approve a deed in leiu or short sale if I still have life savings in funds, etc??

Of course, the move was not my choice, but Uncle Sams. Unfortunately, there are no provisions/relief for situations like this in the military. We are making it now, but not sure how much longer I can "burn" $1000+ a month that I will never see again..

Please Help!

adonis · Posted: Sun May 06, 2007 9:17 pm Post subject:

Welcome Prkaiser,

Did you the help of any real estate agent for selling your home in Michigan? I have heard that a good real estate agent can really help in this process.

Samantha

Hi Prkaiser,

So far it has been a wise move on your part. You have been staying current on your loan even after moving out of the Michigan property. But then the house has been on the sale for more than a year. So, that is something which is bothering you. There is also another consideration that you will be deployed soon.

In this case, I think you should consult your lender if he would allow you to go for a deed-in-lieu of foreclosure so that you can hand over the ownership rights and he'll get his money by selling off the property.

However, lenders are interested in deed-in-lieu at times when they find that a short sale won't let them get sufficient cash. Otherwise, they may ask borrowers to go for a short sale first and if that does not work out, then the lender looks forward to the deed-in-lieu (dil). However, if the sale price is lower than the outstanding loan balance, the lender cannot collect the deficit through the dil of foreclosure, as he losses his right to do so.

Hope this helps...

God bless you.

Samantha

Guest

I would say you definitely discuss chances of giving over the home to lender using a deed in lieu of foreclosure. The situation you are stuck in, a deed in lieu would be the option to select.

BTW, did you try to rent it out?

kenstampe · Posted: Tue May 08, 2007 6:47 am Post subject:

prkaiser1,

Is your home in Michigan financed using a VA loan? Have you talked to the mortgage company about any options they have for you? If you did, did you ask them about options for reducing or waiving your payments while deployed?

Let us know the answers so we can help you better.

Guest

I two properties in FL which I have stop paying mortgage for about 4 months, I have been served on one property with the foreclosure papers and I am thinking of doing a short sale on one home and try to keep the other home but people are telling me to do a deed in lieu and honestly I don't know what to do. Everyone tells me something diferent and by the way both house will not sale not even close to what I paid for them each home is about 100k negative. What should I do?

Caron · Posted: Wed Feb 20, 2008 1:40 am Post subject: RE: short sale or deed in lieu

Hi Denisse,

Welcome to our forums.

I can feel what you're going through. You can go for a short sale as it won't affect your credit as much as deed-in-lieu does. Know more... .

I feel most of the people around you are suggesting a deed-in-lieu because in such a case the lender mostly does not ask for the deficiency payment.

Good luck

charlesarmbruster · Posted: Wed Feb 20, 2008 11:46 am Post subject:

Although you may not want to be a landlord, renting the Michigan property may be your best alternative. Until home values level off, rental income would certainly offset your monthly 'loss'. Fortunately, you are able to make the payments -- a local realtor can probably service the rental for a fee, including collecting the payments.

Yes, your relations might want to help while you are deployed -- let 'em! Nobody knows who much they can give until they are asked!

A rental property in Michigan may very well be the inheritance you can leave your family in the future. Certainly, real estate is the best investment you can make, no matter what the local economy might suggest in Michigan. Keep the Faith! GOOD LUCK!!

Guest

SORRY, DIDN'T MEAN TO WRITE SO MUCH...TAKE 5 MINUTES TO READ THIS AND AVOID 3 YEARS OF HEADACHE WE HAVE HAD.

Do not rent out the property. My husband and I have a 2nd property as well...not by choice.

Well, we chose to keep our old house on the market and rent our old house AND MOVE TO A BIGGER NEW HOME. First off, we could not find a renter that would pay more than $550 even though the mortgage was $1000. Even though the renters... at the time of moving in... said they wouldn't mind showing the house when a realtor called. When it came down to it...they did mind and pulled this RENTERS HAVE RIGHTS CRAP on us. We even had it in writing...but it didn't matter.

Well..it has been 3 years of two housepayments for us. Tons of different renters later and several that left owing $1000's because it took us 2-4 of listening to false promises from renters to pay and 30 days for us to evict them. Never mind the condition they left the property in.

One renter painted over the wallpaper and wallpaper border. Another renter stole 6 airconditioning window units. Another renter left the pool pump on with no water...burned that up($900). Another renter stole 3 airconditioning units. Another renter let his animals urinate all over the carpet and padding ($3000)...plus trying to get it professionally cleaned 3 times ($400) to get the smell out. Two renters left the house infested with fleas ($130 a pop to have a bug sprayer come out). Another renter let the grass grow up to the knees( with 2 mature trees) and sticks everywhere (6 hours of yard work).
One renter was selling drugs. Another renter put holes in the walls and police were called several times to keep the couple that lived there from killing each other. Another renter moved out in December...there went Christmas for our kids. Took two month to find a new renter. Another one stole the washer and dryer AND would have taken the stove had it not been soldiered to the gas line...because when we entered the property the stove was pulled away from the wall. Another renter left all her furniture and crap....just disappeared from the face of the earth. Another renter's pitbull attacked one of old neighbors grandchildren. WE KEPT TELLING THE RENTERS...NO ANIMALS...BUT THEY KEPT SNEAKING THEM IN.

One of the last renters was an older woman with two teenage daughters. We thought for sure she would be a good tentant. Turns out her daughter who was 15 and mentally challenged was not potty trained....there went the carpet again. And then we found out from our neighbors that there were as many as 30 cats around our home at any given time. She also left owing 3 months rent I might add.

We called the police on the one of last renters to report the window airconditiners stolens...by this time we were mad...but the police pulled the guys file...he had just been picked up for killing someone...SO WE TOLD THE OFFICER...NEVERMIND...WE DON'T WANT TO FILE ANYTHING.

So...we thought...we must not be very good at judging people or we ar just too nice for this business....so we hired realtor to rent out and collect from our tentants....thinking he would have the means to do a background checks on these people....big mistake! The realtor said he was paying the mortgage. We trusted him and we found out 5 months later he was collecting the rent from the tentants and pocketing the money.

IT SEEMED IT ALWAYS COST US MORE MONEY TO FIX WHAT THE TENTANTS DESTROYED THAN WHAT WE MADE IN RENT MONEY.

SO CUT YOUR LOSSES NOW...DAMAGE YOUR CREDIT FOR 8 OR SO YEARS...FILE BANKRUPTCY...WALK AWAY...ANYWAY YOU CAN...EVEN WITH A 10K OR MORE LOSS. AND DON'T RENT OUT ANYTHING...YOU'LL BE GLAD YOU DIDN'T. AND DON'T LEAVE THIS TO YOUR WIFE AND KIDS TO MANAGE...I COULD NOT HAVE DEALT WITH ALL THIS WITHOUT MY HUSBAND....AS TENTANTS CAN BE VERY PUSY.

As for being in the military...I thank you for all you are doing...My dad's been in the military for over 40 years. He manages a base now. GOOD LUCK AND GOD BLESS.

SORRY, DIDN'T MEAN TO WRITE SO MUCH...TAKE 5 MINUTES TO READ THIS AND AVOID 3 YEARS OF HEADACHE WE HAVE HAD.

Janet

adonis · Posted: Tue Feb 26, 2008 3:13 am Post subject:

Welcome JDice,

Thanks for sharing your situation with the community here.

Indeed you've had come across very bad renters. I've not heard anyone else suffering so much by renting out their homes. But perhaps you didn't get the right persons to deal with. But again how does one judge? it is really difficult to get the right renter to can make payments regualrly and even keep the house in good condition.

Moreover, one needs to find a good realtor who in your case turned out to be not worth enough to deal with. Well, what's happened as happened and none can change it..what needs to be done is to learn from past experiences. But what happened with the mortgage payments and did you file bankruptcy?

Guest

Deed and Leu may leave you holding a Federal tax bill, as the lender is using your inability to pay a s a write-off, thus gifting you the difference. Please remember always to do research as this is best. The Military should be able to assist. If anyone sees forcloser as the only option, keep the money (monthly mortgages) as though paying the lender. Transfer the money into Euro or Pounds Sterling, as well as dry goods. It is better to have debt with ownership of none traceable wealth, than debt and nothing at all. gold, silver, indium, cooper

larry · Joined: 27 Jun 2007 Posts: 3328 474.49 Dollars($)

Hi wealthy Man.

It is right that after the deed in lieu the lender don't usually come after you for the deficiency amount and the borrower would have to have the tax on that forgiven amount. But now The Mortgage Forgiveness Debt Relief Act of 2007, the borrowers no longer needs to pay tax on it. Please have a look on this The Mortgage Forgiveness Debt Relief Act of 2007 at http://www.mortgagefit.com/tax/debtforgiveness-reliefact.html

Hope this helps. Feel free to ask if you have any further questions.

Best of luck,
Larry

Guest

the above post that says don't rent.......

the help coming from this poster about not renting doesn't add up

there is absolutely now way that you had 14 renters in three years, especially since you said a couple of months the place was empty.
I have been in real estate for many yrs and have never heard a story such as this. at the very least if you had let 14 different renters move into the home over a 3 year period, you should have made, 14 extra months rent just in security deposits, sorry poster but I'll have to call b.s.

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