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 nakadude
Joined: 20 Jan 2009
Posts: 1
1.33 Dollars($)
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 Posted: Tue Jan 20, 2009 1:03 pm Post subject: Vacation Rental Property |
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| We have a vacation rental property that we've been trying to sell for three years. It has been costing us about $1000 a month as our rentals have dropped significantly. We have a $165K first and a $26K second on the property. We believe that deed in lieu of foreclosure is the best option for us. Could you walk us through the process and what to expect? |
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smithsussane
Joined: 18 Sep 2008
Posts: 3738
Location: Alaska
561.45 Dollars($)
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| Posted: Tue Jan 20, 2009 8:15 pm Post subject: |
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Hi nakadude!
Welcome to forums!
A deed in lieu is accepted by the lender when you are at least a month late on your payments. You will have to apply to the lender by writing a hardship letter mentioning the issues you are facing while paying off the mortgage dues.
Once the lender accepts this, you will have to give away the property to the lender by signing a quitclaim deed. The lender sells the property in the market to recover his debts and the deficient amount resulting from the sale is forgiven. This forgiven amount is taxable according to IRS rules. To know more about deed in lieu, check out the following link:
http://www.mortgagefit.com/deed-lieu.html
Feel free to ask if you have further queries.
Sussane |
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nakadude
Joined: 22 Jan 2009
Posts: 1
1.40 Dollars($)
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| Posted: Thu Jan 22, 2009 9:08 am Post subject: Followup |
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Thanks so much for the information.
Given that this is not our primary residence, what steps do I need to take if we decide to go this route.
Also, the issues of a hardship are different given that mostly, we're losing lots of money and have not actually in am in one of the hardship situations. I understand that my credit rating will take a hit; I just need to know of the best option to be able to work out this financial burden and the steps to take to accomplish this.
nakadude |
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jameshogg
Joined: 20 Dec 2005
Posts: 4291
Location: nevada
509.34 Dollars($)
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| Posted: Thu Jan 22, 2009 11:52 pm Post subject: |
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Hi nakadude,
Though it's your primary residence, the steps for deed in lieu will be same as mentioned by Sussane. You should also note, you will have to convince the lender about the hardships that you are facing and only then the lender will be ready to accept the deed in lieu.
Yes, it's true that after deed in lieu, your credit score will get lowered by around 250 points. There are various ways through which you can improve your credit. Check out the following link to know more about them:
http://www.mortgagefit.com/credit-rating/credit-repair.html
Thanks |
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