Posted on: 19th Oct, 2007 08:50 am
Hello,
My mom and her daugher (along with her husband and two kids) live in a single-family house for one year now. The problem is that my mom and my brother-in-law have to work overtime everyweek just to pay the mortgage and the other bills. My mom is financially responsible for the loan and she can't stand this situation anymore. She is currently current with her mortgage but not having $1 left at the end of month makes her cry everyday. She was considering just not paying the mortgage anymore but I suggested she go into DIL.
My question is, what are the steps involved in DIL? If the next mortgage is due on November 1st and she doesn't pay, can she start the DIL process right after December 1st?
Also, how do we start such a process? I can't seem to figure out how to help her with that because I don't know how to proceed. Is there anyone we can talk to to help us with this? What is the first step in DIL?
We live in Everett, MA.
Thank you in advance!
My mom and her daugher (along with her husband and two kids) live in a single-family house for one year now. The problem is that my mom and my brother-in-law have to work overtime everyweek just to pay the mortgage and the other bills. My mom is financially responsible for the loan and she can't stand this situation anymore. She is currently current with her mortgage but not having $1 left at the end of month makes her cry everyday. She was considering just not paying the mortgage anymore but I suggested she go into DIL.
My question is, what are the steps involved in DIL? If the next mortgage is due on November 1st and she doesn't pay, can she start the DIL process right after December 1st?
Also, how do we start such a process? I can't seem to figure out how to help her with that because I don't know how to proceed. Is there anyone we can talk to to help us with this? What is the first step in DIL?
We live in Everett, MA.
Thank you in advance!
talk to the lender that currently holds the mortgage. that is the best place to start. if they can't help, a refinance could help, however if they have only been there a year i don't see how.
what happened in between getting the house and now? was the house not affordable to them from the beginning?
reassure her that it is hard but someday they are going to own that home and have a real asset on their hands. the alternative is what? renting and paying someone elses mortgage? would this put them in a better financial situation? i doubt it. give her comfort in the fact that she has family that is willing to help. this is very encouraging to me and especially because this is rare in this day and age. we all struggle especially with bills such as this. the important thing to keep telling her is that she is providing a safe place for her family and that , yes, it is going to be hard but with faith everything will work out in the end.
i know this doesn't answer your deed in lieu question but hopefully it will help you look at other possiblities.
what happened in between getting the house and now? was the house not affordable to them from the beginning?
reassure her that it is hard but someday they are going to own that home and have a real asset on their hands. the alternative is what? renting and paying someone elses mortgage? would this put them in a better financial situation? i doubt it. give her comfort in the fact that she has family that is willing to help. this is very encouraging to me and especially because this is rare in this day and age. we all struggle especially with bills such as this. the important thing to keep telling her is that she is providing a safe place for her family and that , yes, it is going to be hard but with faith everything will work out in the end.
i know this doesn't answer your deed in lieu question but hopefully it will help you look at other possiblities.
You're right, the house was not affordable from the beginning. I think it was the illusion of providing a better life to our family that got her into this deal. I mean the house is beautiful and all but the mortgage is just too much for what she makes. She lived on rent for 7 years and even though she paid someone's mortgage, she still had a good amount of money left over at the end of the month, which is not what happens now.
I disagree when you say that she will own the house one day because it is a 30-year mortgage she's almost 50 yrs old. I can't imagine her paying a mortgage until she's 80, specially considering how much the mortgage is. Also, she's not the kind of person that would allow someone else to support her once she retires.
I think what worries her is the fact that the US economy (thanks to Bush) just keeps getting worse and the housing market collapsed. House prices just keep getting lower and people just don't want to buy houses right now.
But thank your very much for your answer! It did help a lot.
I disagree when you say that she will own the house one day because it is a 30-year mortgage she's almost 50 yrs old. I can't imagine her paying a mortgage until she's 80, specially considering how much the mortgage is. Also, she's not the kind of person that would allow someone else to support her once she retires.
I think what worries her is the fact that the US economy (thanks to Bush) just keeps getting worse and the housing market collapsed. House prices just keep getting lower and people just don't want to buy houses right now.
But thank your very much for your answer! It did help a lot.
Have you tried to sell already?
Just because the market is down doesnt' mean nothing is selling. It just isn't selling for top dollar. There is actually an increase in investors looking to buy properties. Not everyone is going to low ball you. If an investor can make a little off of you breaking even they just might do it if the house is right.
Just a few more thoughts. Best of luck to all of you.
Just because the market is down doesnt' mean nothing is selling. It just isn't selling for top dollar. There is actually an increase in investors looking to buy properties. Not everyone is going to low ball you. If an investor can make a little off of you breaking even they just might do it if the house is right.
Just a few more thoughts. Best of luck to all of you.
Thanks!
Yeah, the house has been on the market since March but so far no offers. We put a price on the house so that we could pay the mortgage company and the 4% to the real estate company that's listing the house. But even tough our house is new (built 2005, we're the first owners) the price is still very high for the city we live in. I don't know if Zillow is accurate but right now the price is just a few thousand dollars above what Zillow estimates.
We could try a short sale but I doubt my mom would want to own thousands of dollars to the mortgage company. I think she would rather take that credit report hit of a DIL. Like I said, the house was new when we moved in so we had to put carpets, appliances, etc.. so she went into greater debt. What she makes now is not enough to pay what she owns in credit cards + mortgage.
Thank you!
Yeah, the house has been on the market since March but so far no offers. We put a price on the house so that we could pay the mortgage company and the 4% to the real estate company that's listing the house. But even tough our house is new (built 2005, we're the first owners) the price is still very high for the city we live in. I don't know if Zillow is accurate but right now the price is just a few thousand dollars above what Zillow estimates.
We could try a short sale but I doubt my mom would want to own thousands of dollars to the mortgage company. I think she would rather take that credit report hit of a DIL. Like I said, the house was new when we moved in so we had to put carpets, appliances, etc.. so she went into greater debt. What she makes now is not enough to pay what she owns in credit cards + mortgage.
Thank you!
Your realtor should be able to structure the short sale for you. Unless your local rules are different all you owe after the short sale is taxes on the difference. And for the rest of the year I don't believe you have to pay said taxes (congress passed a law for the year that prevents the irs from collecting the income tax). It would be best to consult an attorney to see if this is true in your area.
Oh and to answer your original question which I never did... You need to talk to the current mortgage lender about DIL. It is unlikely they will want to being the fact the value isn't there.
Oh and to answer your original question which I never did... You need to talk to the current mortgage lender about DIL. It is unlikely they will want to being the fact the value isn't there.
I'm sorry but I didn't quite understand when you said, "It is unlikely they want to being the fact the value isn't there." Are saying that they probably wouldn't accept the DIL because the value of the house is too high compared to the other houses in the area?
Thank you for explaning how a short sale works. I thought she would have to pay the difference to the mortgage co.
Thank you for explaning how a short sale works. I thought she would have to pay the difference to the mortgage co.
Sorry I should have clarified. A lender typically does not want to take your property unless the following condition is met. (The house needs to sell for equal or above the current mortgage payoff amount plus any additional expenses.) This is true regardless of whether they get a DIL or go through foreclosure. In either situation all the bank cares about is $.
Let me add that not all real estate agents know how to handle a short sale. Normally the bank will say no to every option you give until they finally say yes. This can be frustrating for someone who doesn't know what is coming. The trick is making the lender aware of the loss they are going to incur if they don't allow the short sale. Same thing goes for DIL. Ultimately it is up to the lender and the best thing to do is keep trying.
My recommendation is don't give up easy. The lender is going to say no several times before you can even get a maybe. Be persistant and keep trying. If one person tells you no, find a different person, etc. etc.
Let me add that not all real estate agents know how to handle a short sale. Normally the bank will say no to every option you give until they finally say yes. This can be frustrating for someone who doesn't know what is coming. The trick is making the lender aware of the loss they are going to incur if they don't allow the short sale. Same thing goes for DIL. Ultimately it is up to the lender and the best thing to do is keep trying.
My recommendation is don't give up easy. The lender is going to say no several times before you can even get a maybe. Be persistant and keep trying. If one person tells you no, find a different person, etc. etc.
I understand now.
Once again, thank you very much for you help! I appreciate you taking the time to answer my questions.
Once again, thank you very much for you help! I appreciate you taking the time to answer my questions.
Feliperm,
If you wish to know about the steps involved in Deed-in-lieu, please refer to a previous discussion at http://www.mortgagefit.com/know-how/about4510.html#deedinlieuprocess .
If you wish to know about the steps involved in Deed-in-lieu, please refer to a previous discussion at http://www.mortgagefit.com/know-how/about4510.html#deedinlieuprocess .