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I bought my house in 2006 and my wife and I could barely afford it. First house. In late 2008 my wife went from 40 hrs to 10 hrs a week and my Salary got cut and I got moved to hourly. We contacted the mortgage company and asked them if we could restructure the loan but they said my debt to income ratio was too high to redo anything.

We havent been able to make payments for quite some time now and the lender has hired a lawyer to send us the letter of intent to foreclose. Our incomes still arent quite high enough to pay the loan plus our outstanding student loans. This is the first time ive heard of DIL and was wondering if this is even an option for us?

The other thing to note is the house we bought has some problems and needs fixed up fairly badly. It probably will not sell for the purchase price especially with the housing market being so depressed in our area. Does this affect the lenders willingness to do a DIL?

chrisburns · Posted: Tue Sep 22, 2009 7:20 am Post subject:

Have you attempted to do a loan modification with the lender? Perhaps there is a way to lower the payment so you can stay in the home and the lender can continue to make money from it.

gmakerley · Posted: Tue Sep 22, 2009 9:35 am Post subject:

chris, he covered that in the first paragraph, actually.

rams, if the lender has sense enough, it will accept a deed in lieu of foreclosure, rather than undergo the expense of all the legal hoops that must be jumped through. discuss this with your loss mitigation department at the lender. you may want to discuss this also with an attorney (beforehand) - hopefully at no cost at that point - to see what assistance you might receive on that end.

i happen to think that a deed in lieu makes sense, but not every lender agrees, clearly.

chrisburns · Posted: Tue Sep 22, 2009 1:45 pm Post subject:

well just talking to the lender is not attempting a loan modification. Until you submit a full loan modification package complete with the financial forms, supporting documents, hardship letter, etc.. then they can't really say if you qualify or not..

gmakerley · Posted: Tue Sep 22, 2009 2:17 pm Post subject:

i guess i took that "talked to" and figured they'd fully investigated. i agree, chris - without a full effort to modify, you don't know if it will work or not.

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