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Deed in Lieu of Foreclosure - Defective House as Reason

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mikeaz Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)	Posted: Thu Mar 10, 2011 2:51 pm    Post subject: Deed in Lieu of Foreclosure - Defective House as Reason Like 0 Dislike 0 I have a neighbor that has had his house diagnosed with being defective (everything from plumbing, roof, stucco, foundation and black mold), etc... There are many homes in the surrounding area that may have the same results and many have already left. Due to the complexities of lawsuites to file against the major builder, i.e. statute of time for repair, uncooperative builder, legal fees, scheduling contractors to fix, having enough money left from potential class actions, etc.. The question would be, is a home that was purchased at $173,000, rose to $240,000, and now worth $55,000 (but with construction defects only $30,000) a cause to request a "deed in lieu of foreclosure"? From what I can see, many of these agreements have a person explain "why they can't pay or afford the mortgage"....what if the house is falling apart as well as underwater? Is that a reasonable cause? Thanks so much.
jameshogg Joined: 20 Dec 2005 Posts: 10477 Location: Nevada 990.06 Dollars($)	Posted: Thu Mar 10, 2011 11:17 pm    Post subject: Like 0 Dislike 0 Hi mikeaz, Your neighbor can contact his/her lender and apply for a deed in lieu of foreclosure. It will be the discretion of the lender whether or not he will consider your friend's request to give him a deed in lieu of foreclosure. Thanks
mikeaz Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)	Posted: Fri Mar 11, 2011 9:05 am    Post subject: Like 0 Dislike 0 Thanks jameshogg....definitely will as in most circumstances the lender would be the deciding factor. Does anyone have any experience with this type of situation, or know if construction defects is a reasonable cause for DIL (or have had it listed as a reasonable cause)? It's a situation outside the norm for the most part, but there are many communities (built between 2004-2007) that have faced the same fate due to a rush to build for demand and very poor craftsmanship.
adonis Joined: 22 Oct 2005 Posts: 10562 Location: ALASKA 1089.18 Dollars($)	Posted: Mon Mar 14, 2011 12:11 am    Post subject: Like 0 Dislike 0 Welcome mikeaz, Construction defects may help your friend to get a deed in lieu of foreclosure. Your friend can contact the lender for deed in lieu of foreclosure but things may vary from one situation to another. So, it will be discretion of the lender whether or not he will consider your friend's request. _________________ Procrastination is the enemy of your financial success

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