Posted on: 21st Dec, 2007 08:25 am
I live in MD and own 2 investment properties in FL.
The balance on the mortgage is more than the value. If I do a DIL can the lender come after me for the difference??
Also, What about if I do a forclosure, can they come after me for the difference??
The balance on the mortgage is more than the value. If I do a DIL can the lender come after me for the difference??
Also, What about if I do a forclosure, can they come after me for the difference??
In most states the law is written in an "either or" fashion. Either the bank persues the security (the home) through foreclosure as a default remedy OR they pursue the borrower...not both.
You'll need to check with a Florida attorney to see if Florida law complies with that principal.
As far as a DIL, since foreclosure was not commenced, it stands to reason pursuing the borrower is left open. I think one would definitely want to have in writing as a part of DIL agreement the lenders written guarantee NOT to pursue a judgement for any shortfall.
My foreclosure book directs folks in your shoes on just how to negotiate with lenders to reach this agreements and protect yourself in the process.
Good news...the President signed into law yesterday any "forgiven" amounts as non-taxable which helps you requests a short sale figure...liquidate the property for less than you owe now with the lenders approval. Subsequently avoiding both foreclosure and DIL.
Look into it at my site
themortgageinsider.net
Good Luck
Rob K. Blake
TheMortgage Insider
You'll need to check with a Florida attorney to see if Florida law complies with that principal.
As far as a DIL, since foreclosure was not commenced, it stands to reason pursuing the borrower is left open. I think one would definitely want to have in writing as a part of DIL agreement the lenders written guarantee NOT to pursue a judgement for any shortfall.
My foreclosure book directs folks in your shoes on just how to negotiate with lenders to reach this agreements and protect yourself in the process.
Good news...the President signed into law yesterday any "forgiven" amounts as non-taxable which helps you requests a short sale figure...liquidate the property for less than you owe now with the lenders approval. Subsequently avoiding both foreclosure and DIL.
Look into it at my site
themortgageinsider.net
Good Luck
Rob K. Blake
TheMortgage Insider
I am a florida lender. New laws that are being passed through congress right now will allow home owners that sell their homes via a short sale to be forgiven for the difference. Normally they will not come after you because in order to sell the home the lender will have to agree to that amount.
If you foreclose and they are able to sell them home you may have to pay taxes on the difference of the sales price and what you owe. But laws are being implemented to try and give consumers a tax break during these tough times.
If you foreclose and they are able to sell them home you may have to pay taxes on the difference of the sales price and what you owe. But laws are being implemented to try and give consumers a tax break during these tough times.
Great info Rob K. Blake and Bradley D. Gertz. Can you please give a bit more info regarding this new law? Hope that law will be a great relief for the borrowers.
Thanks,
Larry
Thanks,
Larry
Larry, you can check it out from http://www.mortgagefit.com/tax/debtforgiveness-reliefact.html . Shane has put down some facts on what the law is all about.
Thanks Blake and Brad for the valuable information.
Just a simple question to both of you, is it not true that the lender does not have the right to ask for deficiency if it's a deed-in-lieu, leave aside that there is a law now? If that is so, then the lender shouldn't ask for the deficiency if he is agreeing to a dil.
As much as my undertanding goes, the new law is all about giving homeowners a tax break but it doesn't stop lenders from asking about payment of deficiency.
God bless you.
Samantha
Just a simple question to both of you, is it not true that the lender does not have the right to ask for deficiency if it's a deed-in-lieu, leave aside that there is a law now? If that is so, then the lender shouldn't ask for the deficiency if he is agreeing to a dil.
As much as my undertanding goes, the new law is all about giving homeowners a tax break but it doesn't stop lenders from asking about payment of deficiency.
God bless you.
Samantha
If they foreclose there can be a defiency amount that they can come after you for. However, if you do a DIL, then you should not be responsible for any deficiency. This is the primary advantage of doing a DIL.