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best way to get rid of mortgage?

Posted on: 07th Sep, 2006 06:00 pm
hello. im glad i found such a community in webspace. first of all, sorry if some of my sentences dont make any sense but i never had to deal with loans, mortgages etc..

anyway, im trying to get some info for my parents regarding how to get rid of home loan mortgage.

i was reading about deed in lieu and i think thats the best option for my parents.
now, heres my situation: my father got really sick and he wont be coming back to work anytime soon. his work was the main source of income. we cant really afford anymore for the home mortgage. we would like to just get rid of the property and move on. we lived here for about 2 years and even if we sell the property, we wont get anything out of it beacuse of outstanding tax from the previous owner (i dont know the excact details). so we were looking into moving out as soon as possible. whats the best way to do so? also i must add that two mortgages (first and second) are used to cover our home loan. i dont know if deed in lieu works if you have second mortgage also.. i know that we could somehow negotiate with lenders to lower the mortgage or something, but we dont want to keep the house beacuse we wont be able to pay for it anyway..

also, one more question, since my car is registered on my fathers name. could bank took the car from us to cover the outstanding debt? if yes the how much time after the last payment was due?

sorry for so many questions, i hope anyone answers this. thanks.

Welcome to the forums.

Since you have two mortgages, therefore, you will have to first pay off the first loan, as it is the primary lien on your property. Then comes the payment for the second lender. Deed-in-lieu could have been the best option since you are also willing to move out. But if you hand over the property to the first lender, you need to pay the second lender before you move out. This is because the second lender also has a lien on your property, though that I subordinate to the first.

The only way that I find is that you negotiate with the second lender and try to reduce the payments, so that you can clear that mortgage from whatever cash you have at hand and at the same time you do the deed-in-lieu where you give away your home to the first lender. This way, all your debts against the home will be cleared.

Hope this is clear.

If you have further questions, feel free to ask.


Posted on: 07th Sep, 2006 08:33 pm

You can go for forbearance by which the lender can make suitable adjustments to the payments and allow you to follow an alternative payment plan. But whether both the lenders will agree, is a matter of doubt. Also, you don't want to stay in this house any more, so I think deed-in-lieu is only way to improve your situation somehow.

The deed-in-lieu affects credit score no doubt, but it's better than a foreclosure and in your situation, this seems to be the only way.


Posted on: 07th Sep, 2006 09:10 pm
I don't think the bank can take away your car though it is registered on your father's name. because your property is the security here and not the car. For that, the bank should have mentioned in the loan document that it may take away the car if you default.

Posted on: 07th Sep, 2006 09:46 pm
Thanks for all you replies.

I have a couple of more questions.
We have our payments due Sept 18th (we were never late with our payments), how much time it would take for bank to actually to take action and foreclosure?
Since we have 2 lenders for 2 mortgages then lets say we are going to have 2 foreclosures?
Can we expect a guy to come to our house and take away furniture to cover the debt?

Also, we dont really care about losing our property and my parents said they dont care about their credit score going bad (this is beacuse we are permanent residents and they said after couple of years they arent gonna live in this country). They are just afraid that the bank might take the cars and money thats left from their bank account to cover the outstanding debt.
Now heres my another questions; could the bank forcefully without asking take the money from their bank account (we dont use automatic payment method)?
Is my mother responsibile for the debt if the title of the house figures on my fathers name? Also monthly payments have only my fathers name on them.
Sorry for a lot of questions again.. and again thanks for all your replies.
Posted on: 08th Sep, 2006 10:11 am

If the title of the house is in your father's name then only he is responsible for the debts and your mother has no obligations to the payments.

Posted on: 08th Sep, 2006 02:23 pm
Hi Wonderer,

It depends on the situation and also from one state to another. In some cases the time could be 3 months while it could be up to 1 year also depending upon the situation.
Posted on: 08th Sep, 2006 02:52 pm
"Can we expect a guy to come to our house and take away furniture to cover the debt?
Hi wonderer,

In a foreclosure proceeding the personal belongings are not taken away to cover the debt amount.

And since the mortgage was for the property, the property will be sold to recover the debts of the lenders.

Posted on: 08th Sep, 2006 03:50 pm
Hi Wonderer, you asked about two foreclosures.

Let me make it clearer for you about what actually happpens. If the first mortgage lender had started the foreclosure procedure then his debt will be fully paid off and after that the remaining amount will be available to be paid to the second mortgage lender.

Even if it is that the second mortgage lender forecloses, the first mortgage will have to be paid off first as it has primary lien on the property.

Posted on: 08th Sep, 2006 04:11 pm
i want to get rid of my house i got one of those predatory mortgage deals, 80 by 20 interest only with 2 mortgages, 5 years later we owed more to the bank, we could not refinance, no equity on the house, the mortgage payments were so high we could not afford any estra money into the principal, or fix the house, on top of it my husband lost his job, and now we could not send mortgage payments, we tried to make a deal with the bank, they told us we can have a loan modification and they been fooling us for more than a year. what should we do?
Posted on: 30th Nov, 2009 12:35 pm

Since you signed on the promissory note while taking the loan, you are fully responsible to pay it off. If you don't pay off the loan, the lender will foreclose on the collateral. A loan modification is a good option if you are eager to keep the house. But in case you do not have any intention of retaining the house, you can short sell the property or do a deed in lieu of foreclosure with the lender.
Posted on: 01st Dec, 2009 03:57 am
inasmuch as you are unable to make payments, and your lender doesn't seem to have a solution after a year, it would make sense to me that you attempt to sell the home. that may result in a short sale, as noted, which you'd have to clear with the lender. also possible is a deed in lieu of foreclosure, if that makes sense. ultimately, if you do nothing, of course, the lender will file a foreclosure action to take back its collateral (the house). in any event, you may be facing a deficit when the home is sold or taken back, and the lender may seek repayment of that deficit. keep this in mind, as you may have a continuing debt after all is said and done with the house.

do you have a lawyer? you ought to, though you can try to negotiate with the lender on your own. in any event, bring up these proposals with the lender and see what they have to say.

it's pretty clear from what you wrote that you cannot make payments at this time, so you need to come to a swift resolution with them.
Posted on: 01st Dec, 2009 06:55 am
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