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Not late on payments, but want a Deed-In-Lieu

Posted on: 22nd Dec, 2006 11:48 am
I have a condo that I purchased right before the housing bubble in the South Florida market burst. It's being rented out and I'm strapped to pay all of my bills.
I am pursing a Deed-In-Lieu of Foreclosure with my lender who holds the 1st & 2nd that I took out when I did my 100% financing. Home values are down, so refinancing is not an option. I just want to get rid of the property.
However, I am not late on any of my payments as of yet. It's getting close and I'm scraping by. Do you know if they'll consider a DIL even though I'm making the payments? From what I've read online, most people are late for a few months and then the bank offers to do a DIL. I'd like to just orove that I'm going to be late and have them approve my DIL request.
I'm about to fax in proof of what I earn and how I'm about to be behind and see if they'll accept. I'm keeping my fingers crossed.
But any expertise would be greatly appreciated.
Hi Taylor,

You are right that the lender considers taking over the condo through a deed in lieu only after the borrower defaults on the loan for few months.

Why not sell the condo if possible, what the market is like now, would you be able to sell it? If you can continue with the payments for few more months and within that period the condo gets a buyer then you will not have to do a deed in lieu.

Colin
Posted on: 22nd Dec, 2006 12:07 pm
unfortuantely I purchased right before the housing bubble burst.
No one in their right mind would buy a condo in our area for $250,000 plus $250 HOA fees a month when they can get a single family home for the same price.
Posted on: 22nd Dec, 2006 12:46 pm
I just called my lender and they said that I don't have to be delinquent to request Deed in Lieu.
Posted on: 22nd Dec, 2006 01:07 pm
If your lender doesn't accept the DIL, they may be willing to accept a short-sale.

A short-sale is simply them agreeing to accept less than what is owed to pay off your liens. And it may be a way to go ahead and sell at a lower amount.

Good luck.
8)
Posted on: 22nd Dec, 2006 01:40 pm
Hi Smtaylor,

The lender may not allow you for a deed-in-lieu as you aren't late on any of your payments. Generally, lenders check whether you are late on payments for at least 2 months. Only then will they allow you for a deed-in-lieu.

I think I'll go by what Michael says. The short sale seems to me a better option too. It's a process by which the lender will sell your property at a price lower than the outstanding debt.

You can go through our previous discussions to know more on Short Sale .

Thanks,

Caron.
Posted on: 22nd Dec, 2006 09:28 pm
Hi Taylor,

You can pay late installments on the loan. The lender may then agree on a deed in lieu. But late payments and deed in lieu will affect your credit score. However, a short sale does not affect the score to that extent.

Thanks,
James.
Posted on: 23rd Dec, 2006 03:40 am
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