Looking at Deed in lieu/military move

prkaiser1 · Joined: 06 May 2007 Posts: 3 3.80 Dollars($)

I am in desperate need of advice!! I am active duty military and was stationed in Michigan away from a base on a special duty assignment. Due to government orders, I am now stationed in North Carolina (since July 2006) My family stayed in michigan until December 2006 to try and sell the house to no avail. It has been vacant since then. It has been on the market for 1 1/2 yrs as of this month..

I am priced below what I owe on the mortgage, and have been for a while..in addition, I have paid out over $12,000.00 in mortgage payments since my relocation that I will never see again. If my house sells at exactly my asking price tomorrow, My total losses since my relocation will be in excess of $21,000.00.

I am not in default and have been scraping to make these payments to an empty house hundreds of miles away. I know the bank will not consider a DIL until I am in default, but I have never missed a payment on anything in my life. My credit is perfect, and I have been fortunate to put a little money away for my 2 childrens college, emergencies, etc. (approx 40 K total in funds and emergency account)..my wife also owns land in another state..My big question is: will I be penalized for living my life responsibly??in other words, will I have to deplete my life savings/assets before the bank will accept a DIL or short sale? I have a loss/mitigation package from the bank, and they ask to know all assests/accounts etc..will they laugh in my face until I am flat broke? We have sacrificed so much in my 15 years in the military to get where we are financially and it makes me physically ill to think how much I am loosing every month..it seems life would be much simpler if I were 40K in debt instead, and file bankruptcy and forclose like others I have known.

we have thought about renting it, but rentals are flooded in the area and dont want to take it off the market in the hopes that "tomorrow might be the day" for an offer. Being a days drive away from it and having to pay a property manager doesnt look good either.

The sad part is, I do not believe I did anythig wrong..this is all the direct result of fulfilling my military obligations. I had no choice in the matter. My family and I simply cannot deal with this any longer, mentally or financially.

sorry about the rambling...We just really need help fast. This is truly a nightmare that has affected us in too many ways to mention. Please let me know what you would do.

thank you all for listening...

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

Hi Prkaiser,

Welcome to the forum.

When you are facing so much trouble in selling the house, why don't you stop making payments towards it? Once you stop paying for it, it will be considered as 'default'. Then the lender may also proceed for a DIL or short sale.

As you are no more interested in keeping the house, then I think you will have no problem in discontinuing the payments. Though with a default, your credit score will be affected. But, you can surely rebuild your credit in the future. To know how to repair the credit, you may refer to: http://www.mortgagefit.com/credit-rating/repair-report.html

0.10 Dollars($)

Hi Prkaiser,

Your house is already in the market for several months. And it seems that you do not want to keep the house. Then why are you continuing to pay the laon?

Is there any specific reason behind that? please explain.

helping_user · Posted: Wed Aug 22, 2007 5:17 am Post subject:

Hi Prkaiser,

I agree with Larry but over there one negative point is there. For the time being your credit score get low down.

I personally advice you talk with your lender and disclose your complete problem in front of him. Ask him whether he can make your home sale possible. Because they should have lots of contacts of borrowers looking for home.

Else try to negotiate with him and come up with one better solution for both of you.

Thanks

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

prkaiser1 · Joined: 06 May 2007 Posts: 3 3.80 Dollars($)

Thank you all for responding..one day before posting my question, my wife sent off yet another mortgage payment. I had her stop payment on the check, so now I guess we have officially decided we have had enough. I must say we are now very worried about what will happen next, as we have never even been late on anything before..

I guess my next question is what will happen now? I plan on approaching the bank for a deed in lieu, but am still scared to death they will go after my savings. Looks like we have no choice in the matter now. If they say no to a DIL, I know it costs them money for forclosure, and I pray they think of me as a "little fish in a big pond" and do not pursue any type of deficiency judgement (I owe 108K on the property).

Would it be wise to consult a Lawyer? (Again, I am in North Carolina and the property is in Michigan, so I am not sure how familliar they would be with Michigan laws)

My next question is, my contract with my realtor expires Sept 15th...with things as they are now, should I continue to list the property and find a different realtor, or should I let the listing expire and stay the course with a DIL or forclosure? Would it be detrimental to keep the property listed?

Than you all again for listening, and offering your advice!!

Paul

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

Hi Prkaiser,

Why do you think that the lender may not accept a deed in lieu even if you default on the loan? Is there any specific reason behind this thought?

I hope the lender will accept the deed in lieu and sell the house. This will have a lesser negative impact on your credit report compared to a foreclosure.

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