Should I stop payments before negotiating for short sale?

sara · Posted: Wed Aug 20, 2008 5:35 am Post subject: RE: alternative to dil

Hi jenisa,

Dil or deed-in-lieu is a process in which you transfer your property to the lender thereby giving up your responsiblity of paying down the mortgage. The lender will then sell off the home and try to retrieve the amount he has invested in your home. Know more about deed in lieu .

There are several alternatives to deed in lieu. For instance, if you'd like to keep the properties, you may request the lender for a loan modification. There are other loss mitigation options to help you when you're in mortgage problems. Just check out some of the options and then negotiate with the lender.

Take Care

Guest

I hate to break the news to you all, but a DIL, SS, or Foreclosure affects your credit score in the exact same way. One is not looked upon more favorably than another. They have the same affect on your credit.

adonis · Posted: Tue Sep 02, 2008 12:36 am Post subject:

This is indeed news! I mean when i read the posts of experts visiting our forums such as in http://www.mortgagefit.com/deedinlieu/affectcredit.html#39235 , I do find it different.

Guest

Wow, Kish....they were able to forgive a difference of $200k. That's great. Im waiting to hear back for my DIL proposal. The difference they would have to eat is about $60k. I pray and hope they accept it. This has been nothing but a monkey on my back.........

Guest

When is the lender supposed to inform you about the deed in lieu?

vegas_storms · Joined: 12 Sep 2008 Posts: 67 3.54 Dollars($)

There can be a difference between Deed-in-lieu, Short sale & Foreclosure as far as their affect to your credit rating.

If you go through the foreclosure process then you will undoubtedly show 120 days late or higher on your credit once everything is finalized thus seriously affecting your credit score.

BUT

If you go through Deed-in-lieu or Short Sale it is possible to:

If you can get the lender to report it favorably for you - must be in writing to protect yourself before you finalize the Short sale or Deed-in-lieu.

With no late payments showing and it being reported as "paid as agreed and in full" credit remains the same. This is happening more and more as lenders lose an average of $50k additional dollars going through foreclosure and are sometimes willing to do almost anything to avoid it. Don't ask them if they will do it, tell them they will do it or short sale deed-in-lieu will not continue and see if they call your bluff. Worst thing that can happen is they say no.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.07 Dollars($)

kingno1,

Yes, a short sale would be a better way to go. Most banks will do a short sale when a reasonable offer to purchase the home is made. They will not do a short sale if they do not feel the offer is of fair market value such as selling the home at a discount to a relative, etc. If you are just looking to get out from under this home, putting it on the market and the bank accepting a short sale is most likely the best way to go.

kingno1 · Joined: 25 Apr 2008 Posts: 56 19.98 Dollars($)

Bank is kind of delaying even after submitting the offer. So, I called them last week saying that I cant afford mortgage from this month. Bank is going to let me know the decision tomorrow as the buyer revised his offer to 300 from 325, while i owe 530 on the home.
I am talking to my assigned banker from my lender today and she said that the 1099 issued will be on fair market value - sold value rather than 530 - sold value. Is this true? I dont believe this statement but, I would be more happy if this is the case. I live in CA and counting on Mortgage relief act but, if something doesn't go through well, fair market value - sold value definitely relieves me.
Suggestions?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.07 Dollars($)

Hi kingno1,

The 1099 would be on the difference from what the home sold for and what you owed so in this case if they accept the offer of 325K but you owe 530K then you would recieve a 1099 for 205K. Check with an attorney about the 1099 since I am not 100% sure on this.

Guest

is there a way to stop a short sale

smithsussane · Posted: Tue Sep 30, 2008 11:15 pm Post subject:

Hi Joseph!

Welcome to Forums!

If there is a contract with the buyer then you will have to have a word with the lender, your lawyer and the buyer and the realtor. You can also refer to the following link:

http://www.mortgagefit.com/problems/stop-shortsale.html

Feel free to ask if you have further queries.

Sussane

Guest

i am currently 2 mos. behind my mortgage aug. sept and i did talk to my lender and i paid 1 mos mortgage with late fee at the end of sept. i am due every 1st of the mon. now its oct. and i wont be able to pay for my mortgage again its way too high. they told me i am ok for a loss mitigation but i have to wait for maybe abt 30 days. we would like to relocate eventually so do i need to find a realtor now and start putting our home in the market? pls advise me

smithsussane · Posted: Fri Oct 10, 2008 10:28 pm Post subject:

Hi nya!

Welcome to Forums!

You can try and rent the house to someone and pay the mortgage from that amount. You can also opt for a short sale and speak to the lender about that.

Feel free to ask if you have further queries.

Sussane

kingno1 · Joined: 25 Apr 2008 Posts: 56 19.98 Dollars($)

Hello,
Bank did sent me an official Short sale letter for a price of 335K based on a buyers offer to purchase. He is going through an FHA loan program. The appraiser came in yesterday and he appraised it for 321K. My buyer is coming back to me now and saying that he dont want to put money from his pocket and asking me to talk to my bank to reduce the price. We are almost at the edge of closing the escrow next week. I conveyed this to my bank this morning and waiting for them to respond. Now my options are...
1) either bank should reduce the price my 15K.
2) If the bank is willing to reduce some, I can pitch in some to meet the buyer.
3) If the bank dont want to reduce that amount, they are OK to do Deed in Lieu.

I want to negotiate with my bank to see if they reduce the price..worstcase atleast pitch in half, so I can come up with other half.
Taking the worst case scenario, if the bank doesnt agree for that, then it will be me putting
a) Short sale with me putting 15K from my pocket (I got to partially borrow this)
b) Let the bank do deed in lieu.

I Need some expert advise here on what would be the best option given the long term implications and stuff like that.
Please help, Experts!

adonis · Posted: Sat Dec 06, 2008 12:19 am Post subject:

Welcome kingno,

If the lender goes in for a short sale, then definitely you will have to pay the deficient amount from your pocket. If you do not pay that, then the lender may place liens on other properties that you own. If you go for a deed-in-lieu foreclosure, your deficient amount will be forgiven but it will considered as an income by the IRS and you will have to pay taxes on that amount.

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