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How do I apply for DIL?

Posted on: 27th Sep, 2006 07:51 pm
Hello. Im writing this on behalf of my father whose condition is very serious and will be unable to work anytime soon.
My father was the only source of income to pay the mortgage, howerver at this situation we are about 25 days behind with our house mortgage payments. Actually we have 2 mortgages on our house. We never were late with our payments except when our father was diagnosed with serious health problems (in fact the doctor says he wont be able to hold more than 2-4 months).. so I'd like to ask couple of questions..

1. My mother doesnt work, her name is on the title of the house, but her name is not on the mortgage. Will she still be responsible for the mortgage after my father passes away? If yes, can we remove her name in a reasonable amount of time from the title? Will she still be responsible after her name is removed from the title?
I must add we DONT want to keep the house. If we could we would give the house to the bank tomorrow and move out the very same day.. anyway;

2. Ive also read some stuff about dead-in-lieu foreclosure. Is there a way to apply for this kind of foreclosure? I called the first mortgage lender and they told me that the normal foreclosure process starts after payments are 3 months behind. Howerver this generates huge stress on our family. I'd rather have deed in lieu done and move on with our lives ASAP.

3. Also when I called the first mortgage lender (wamu) they told me they will send me some kind of packet(forms?) to fill out. When I asked them how is this gonna help us I didnt receive an answer. Any idea what that could be?

4. Lets say the actual foreclosure takes place. We get evicted and we didnt pay mortgage for lets say 6 months. Are we still gonna be responsible to pay for that 6 months? What about other foreclosure fees? Will this be decided by the court (Im assuming they whole foreclosure process takes place in the court) or by the lender? Will they consider my father illness and our willingess to move out from the house? Also, since we have no money to pay for mortgage we wont have money to pay for any additional fees as well, will the lender take away our personal things (cars, furnitures, tv or access our bank accounts and take away last savings) to cover the outstanding debt?

Sorry for so many questions. We will be going with this questions to the 2 lawyers as well but its good to hear other people's opinions as well. thanks guys.
hi rem,

welcome to the forums.

let me answer your first query.

since you are already 25 days behind on your payments, so in case you or your father cannot make the payments, your mother has the liability to pay it as her name is on title. even if your father passes away, your mother has to pay since she is on the title. this will actually help her to save the home from being foreclosed.

you can remove your mother's name from the title using a quit claim deed. but it depends on the lender as to whether he will allow you to do so. this is because he will be considering how he can get back the money from you. also, if you add someone else to the title, either he has to take the liability of paying the mortgages or you need to transfer the mortgages to some other person who will pay them on your behalf.

if you do not wish to keep the house, then you may ask the lender for a foreclosure. but a foreclosure does affect your credit status negatively. so give it a thought before you give the house to the bank.

thanks,

caron.
Posted on: 27th Sep, 2006 09:00 pm
Hi Rem,

"Ive also read some stuff about dead-in-lieu foreclosure. Is there a way to apply for this kind of foreclosure? "
The deed-in-lieu is not a kind of foreclosure. It is actually a process by which you transfer the ownership of the property to the lender in order to stop foreclosure. Know more on Deed-in-lieu before you apply for it. Your lender will be the best person to tell you how to apply for it.

One more thing, if at all you don't want to keep the house, why not consider selling it. You can take the help of a real estate agent for the selling. But you will have to pay him a certain amount in return of his services.

Thanks,

Sara.
Posted on: 27th Sep, 2006 09:49 pm
"Also when I called the first mortgage lender (wamu) they told me they will send me some kind of packet(forms?) to fill out. When I asked them how is this gonna help us I didnt receive an answer. Any idea what that could be? "
May be the lender is asking you to fill up the legal document for deed in lieu. After the document is signed in the presence of a notary public, it should be recorder at the office of the County Recorder.
Posted on: 27th Sep, 2006 10:54 pm
Hi,

As much as I know, the foreclosure fees are paid to the lender before the date of the sale of foreclosure. So, it's the lender who will decide upon the fees.
Posted on: 28th Sep, 2006 01:42 am
Hi,

"We get evicted and we didnt pay mortgage for lets say 6 months. Are we still gonna be responsible to pay for that 6 months? "
A borrower can make payments even after the lender decides to do a foreclosure till the date of sale of property on account of foreclosure.

The lender gets back the amount from the proceeds he receives by selling the property at a public auction (that is, through foreclosure). So, after foreclosure is carried out, the borrower is no longer responsible for the mortgage. Only in case of court foreclosure or deed of trust, the borrower has to pay the outstanding debt.
Posted on: 28th Sep, 2006 02:25 am
Hi Rem,

"Will they consider my father illness and our willingess to move out from the house? "
The lender may consider your situation and waive a part of the fees. But you need to explain your situation clearly so that he can help you out.

"will the lender take away our personal things (cars, furnitures, tv or access our bank accounts and take away last savings) to cover the outstanding debt?"
I don't think the lender will take away your personal property to clear the debt. The lender can only do that if the personal property is kept as the security or collateral for the loan.

Thanks,

Caron.
Posted on: 28th Sep, 2006 02:37 am
Thank you guys so much for the info. I will read more about deed in lieu and for now Im expecting this documents from my lender to come in mail. I will go to the lawyer after I will receive this documents.
Also I forgot to say that we put house on sale about 2 weeks ago. We didnt have any seriouss offers, even though we had open house last weekend. We will be dropping the price of the house a little and see how it goes.
Thank again.
Posted on: 28th Sep, 2006 04:49 am
Sorry for double post as I cant edit my previous one.
Will my credit score be affected by the foreclosure? Im the owners son but my name is not on the title or anything.
Thank you.
Posted on: 28th Sep, 2006 04:57 am
Hi Rem,

Your credit score will not get affected as you are not liable for the mortgage payments. Foreclosure has effect on credit score of only those who are involved with the mortgage payment.

Thanks
R.Baker
Posted on: 28th Sep, 2006 12:15 pm
Hi Rem,

Foreclosure and deed in lieu cannot affect your credit score as your name is neither on the loan nor on the title. Also, if you are not the cosigner or co-borrower, then your score will not get affected.

Thanks,

Sara
Posted on: 29th Sep, 2006 11:17 am
Hi,

I think you are doing the right thing. By reducing the sale price, you may get a suitable buyer. You can also do short sale if the lender may be willing to forgive a part of the loan balance. The sale proceeds will then be used in paying off a certain amount of money owed to the lender.
Posted on: 29th Sep, 2006 11:42 am
Hi,

Instead of a deed in lieu, you can do short sale where the lender allows the borrower to pay a certain percentage of the debt and forgives the unpaid debt. Since you don't wanna keep the house, short sale can be done. But you need to talk to the lender about this sale.
Posted on: 29th Sep, 2006 12:04 pm
Thanks for suggestions.
Jeromes, you are saying that in short sale, the borrower forgives about the unpaid debt if we pay a certain percentage f debt. If I get this correct we will have to pay the borrower some amount of money, however we dont have any money to spare at all..

Also, could you put house on auction by yourself to sell it fast or auction could only happen when there is a foreclosure?
Posted on: 30th Sep, 2006 12:57 pm
Hi Rem,

In short sale, the borrower sells off his property at the permission of the lender in order to repay the mortgage. The borrower pays off a certain amount of debt from the sale proceeds while the lender forgives the rest. So, you need to pay at least some portion of the debt so that the lender can forgive the remainder.

You can take a real estate agent's help and arrange for an auction on your own.
Posted on: 30th Sep, 2006 02:01 pm
ok thanks andy.

today i received this packet from wamu. they require my parents to send copies of payroll stubs and things like that..
they give us a list of documents they need and an additional documents "if you are applying for short sale or deed in lieu consideration". now i have couple of questions with that.
they want copy of sales contract when applying for deed in lieu ("must be signed by both our borrower as the seller and the buyer........") - does that mean they want a proof that we sold a house?
also, on the very bottom it says "please note: if a short sale or deed in lieu is approved, no contributions or credits will be given to any junior liens". does junior lien mean a second mortgage? so they wont pay for second mortgage and we still be responsibile for paying that off even if deed in lieu or a short sale happens?
Posted on: 02nd Oct, 2006 02:29 pm
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