Posted: Fri Aug 29, 2008 10:01 am Post subject: 2nd mortgage: Deed in lieu vs short sale
I own a duplex in palm beach county. It has two mortgages, one for 199,000 and one for 50,000. The 1st mortgage holder has agreed to a short sale, if I can get an offer (highly doubtful). The 2nd mortgage company wants me to send them a complete financial disclosure.
I'm retiring in 9 months and my income is cut to 1/3 of my present salary.
If I can't get an offer, I would prefer to have a deed in lieu performed with the 1st mortgage holder.
Two critical questions:
1. What happens to the 2nd mortage holder (Homecoming financial) if the first goes with the dil.
2. I read that deficiency judgements are not being sought after as much as the public is led to believe. Is that so? Also, can they go after my retirement, soc sec or TSAs?
This is not my home, it was originally bought for income property which has cost me a fortune to remodel, then another fortune trying to pbay mortgage payments on a house once purchased for 259,000 and is now worth, maybe $160,000.
ANY advice or help would be greatly appreciated. Thanks, Linda
If the first mortgage company accepts the deed in lieu then they will not seek deficiency judgment to you. But I feel the second mortgage company has not accepted the deed in lieu. So they can come after you for the deficiency judgment. You should try to pay of the out standing balance of the loan amount. _________________ Good is the Enemy of Great.
Posted: Sat Aug 30, 2008 4:19 am Post subject: RE: deed in lieu and second loan
Hi Linda Troy,
When the first lender accepts a deed-in-lieu or dil (chances are less as you already have a second loan), he uses a non-merger clause in the agreement. This is done in order to prevent the second lender from taking any legal action against the first.
Posted: Tue Sep 02, 2008 5:50 am Post subject: RE: what happens to second mortgage after short sale/dil
Hi Linda,
Welcome back to the forum.
Are home prices going too low in your area? I'm asking this because you don't seem confident that you'd be able to complete the short sale. Whether you go for a short sale or deed in lieu (dil), the second mortgage lender may either sell off your debt to a collection agency just as any unsecured debt. This is because once the property is sold off, the second loan doesn't have a collateral and hence it can be considered as an unsecured loan.
Alternatively, the second lender may also issue a second mortgage charge off implying that he no longer wishes to collect the payments. But you still owe the debt. So, if you still keep paying as much as you can afford on a monthly basis and pay off the entire debt in agreement with the lender, it will help you minimize negative impact on your credit score.
The lender may even forgive the second mortgage debt in case you're not able to repay at least a part of it. But you may have to pay taxes on forgiven debt provided you don't satisfy the criteria for mortgage tax relief .
Posted: Sun Dec 14, 2008 6:47 am Post subject: upside down loan
I owe over $78,000 (and a 15,000 second loan) on my home in Detroit where property has dropped to record lows and home around me are selling for 5,000 or less. Is it smart to start banking my house notes and try to cash it out later for less?
Thanks. _________________ Good is the Enemy of Great.
Clyde Guest
Posted: Mon Dec 22, 2008 1:44 pm Post subject: Deed in Lieu
Both of my mortgage loans are with the same lender (Countrywide). $245,000.00 (first) and $45,000.00 (second). Do I offer a dil for each loan or will one dil do with a "without recourse" provision? How do I initiate a dil? Are there forms on-line that I may use. I am withing 15 days of foreclosure. Is it too late to stop the process?
I would suggest you to immediately speak to the lender about deed in lieu foreclosure and apply for it. You will have to write a hardship letter to the lender for that.
If the lender accepts it, he will tell about the documents that you will need to fill out. I don't think you can find online forms for deed in lieu. _________________ Procrastination is the enemy of your financial sucess
LauraJ Guest
Posted: Sat Apr 25, 2009 12:50 pm Post subject: Help!
I have $176,000 on my first mortgage and $35,000 on my second mortgage. I had a market value appraisal done by a realtor and the home will only go for about $200,000. I will be unemployed after May 20th and my husband will not be able to bear the burden of the loans alone. We filed for bankruptcy a year ago, and decided to keep the house. We now cannot. What should we do? What are our best options? We have tried to do the modification, and we filled out the paperwork but our lender has not contacted us. We contact them and they cannot answer any questions. We simply cannot wait around on them anymore. We don't know if we should just live here until they force us to move, or should we do a short sale, or should we do the DIL? Anything is appreciated!
I would suggest you to check out with your lender whether he would be able to modify the loan or not. If not, then you should apply for a short sale or a deed in lieu. _________________ Procrastination is the enemy of your financial sucess
Sad Sack Guest
Posted: Thu May 28, 2009 7:54 am Post subject: Short sale
Doesn't a short sale require realtor fees? How can you afford them if you are already out of cash?
Niicss
