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mskym101 · Joined: 14 Apr 2009 Posts: 1 1.38 Dollars($)

We have a primary residence (#1)that is way upside down; we have a rental property (#2) that is in the process of a loan modification- we contacted our bank on our primary residence, and because we are current and cannot prove a financial hardship- as of yet-, we are not eligible for a loan modification or re-fi doing the H4H program (bank says there are no guidelines or money available), so now we are considering a DIL or foreclosure on #1. We live in Nevada- can the bank come after us for the balance of #1 mortgage if we let it go? Suggestions and sound advice welcomed. AND- If you have a foreclosure/DIL on your credit how can you do a lease-option to buy for another house?

smckaybiz · Posted: Tue Apr 14, 2009 6:38 pm Post subject:

Welcome to the forums mskym101,

I am not fully aware of your current financial situation but if you can manage to pay your bills currently, then why jump at just throwing away your primary residence because the market is down? Although it is not expected to get back up to the levels of just 2 years ago house values will eventually start to rise again within the next few years and it may put you in a much better situation to do something with it.

I don't think the bank can come after you for the debt if they foreclose but I do know that a DIL doesn't release you of your finacial obligaton to the loan, it just releases the title back to your mortgage company. Please anyone correct me if I'm wrong.

Worst case scenario if you go through with your plan you could always try to find someone willing to do a land contract or article of agreement to purchase a home. A lot of people are willing to take desperate measures to get out of their homes right now.

jenkin7 · Posted: Thu Apr 16, 2009 12:54 am Post subject:

Hi mskym,

I agree with Scott McKay. If you are current on your mortgage payments, letting the primary house go into foreclosure will not be a very good option. If you do a deed in lieu, the lender will probably not come after you for the deficiency. But it can damage your credit almost as much as a regular foreclosure does. You can expect a drop of 250 points on your credit score due to a DIL.

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