Posted on: 02nd Jan, 2008 06:52 pm
My wife and I purchased a house in May 2006. Before we could sell our previous home to move to the new purchase, she died. Consequently I did not move. Our original home is paid for, mortgage free. I have kept up all payments plus paid taxes on the new home, however I am struggling to make payments. The new home is now worth less than the original purchase price and the loans. What is my risk if I do a deed-in-lieu of foreclosure to the lender? Will Countrywide attach my current home?
Hi Percy,
Welcome to forums.
If you go for a deed-in-lieu of foreclosure, first of all, your credit will get affected. And, you won't probably get a sale price with which you can cover the loans. So, there'll be some deficient amount which the lender may demand in case you are not in a state where the anti-deficiency laws prevail.
Thanks
Welcome to forums.
If you go for a deed-in-lieu of foreclosure, first of all, your credit will get affected. And, you won't probably get a sale price with which you can cover the loans. So, there'll be some deficient amount which the lender may demand in case you are not in a state where the anti-deficiency laws prevail.
Thanks
That was me! I was logged out :)
Hi Percy,
The above poster has given you sound info. For DIL your credit score will drop almost 200 points and will appear on your credit report for 7 to 10 years. If the sell price is lesser than what you owe to the lender he may come after you for the deficiency judgment. But the good news is if the lender exempt the deficiency then you may need not to pay the tax on it under new tax relief law.
Feel free to ask if you have any further questions
Best of luck,
Larry
The above poster has given you sound info. For DIL your credit score will drop almost 200 points and will appear on your credit report for 7 to 10 years. If the sell price is lesser than what you owe to the lender he may come after you for the deficiency judgment. But the good news is if the lender exempt the deficiency then you may need not to pay the tax on it under new tax relief law.
Feel free to ask if you have any further questions
Best of luck,
Larry
There will not be a deficiency if you choose deed in leiu of foreclosure. The effect will be on your credit. Do not expect to be granted credit for several years. Are you able to rent out the property to cover the payments? There might be a couple options available to you before going into foreclosure.